Personal Savings Allowance

twister1

I understand that from this April, the first £1000 of savings interest received per year by basic rate tax payers, will be tax free. This is called the Personal Savings Allowance.
Does this mean that all interest earned on savings accounts will be paid gross by Building Societies, Banks and other providers?
For basic rate savers that earn more than £1000 interest per year, how will the tax payable on the amount above £1000 be collected?
Does it mean that any basic rate earner with over £1000 savings interest will have to submit a tax return? If so, this means that those basic rate taxpayers, who now may not be needing to submit a tax return, will have to start submitting tax returns.
Alternately, it may be that HMRC will collate the total amount interest earned each year by every saver and then issue a demand for any tax payable on interest earned by basic rate taxpayers above £1000.
Do we know which of these methods (or an alterative) will be used by HMRC?

talexuser

Yes, all interest gross.
Treasury reckons that 95% of savers will have less than £1000 interest so system will not affect them - no more to do.

How it affects the rest is not clear yet, full tax returns might be a slight pain, but there have been rumours that a simplified interest return form might be on the cards. We are all supposed to be online for tax returns by 2020 - based on the success of other government large IT projects that will be under budget and working well and on time!!!

d70cw6

my great grandchildren may have site of an online tax return.

colsten

d70cw6 wrote: »

my great grandchildren may have site of an online tax return.

What are you on about? I have been completing and submitting my self assessment online for nigh on a decade. It's a very simple and quick procedure if your only income is from salary/pension and/or savings.

OP, you won't need to pay any excess tax until after the end of the 2016-17 tax year. We will have to tell the HMRC about any interest above the relevant allowance but there is plenty of time for us to be told how we need to do this and how the extra tax will be payable.

bowlhead99

colsten wrote: »

It's a very simple and quick procedure if your only income is from salary/pension and/or savings.

And if you can remember your logon ID and password which you only use once a year in the last week of January. Need to dig mine out soon
:cool:

eskbanker

bowlhead99 wrote: »

And if you can remember your logon ID and password which you only use once a year in the last week of January. Need to dig mine out soon
:cool:

I was doing mine last night (I obviously blink sooner than you!) and found that Chrome's autocomplete facility had retained the logon ID since last January, so the site is arguably not as secure as it ought to be (no doubt I can change browser settings somewhere at my end to prevent this from being stored) but that's more convenient than having to fish out the gov.uk paperwork....

colsten

bowlhead99 wrote: »

And if you can remember your logon ID and password which you only use once a year in the last week of January. Need to dig mine out soon
:cool:

Just one of many 'helpers': https://lastpass.com/

talexuser

eskbanker wrote: »

(no doubt I can change browser settings somewhere at my end to prevent this from being stored)

If anyone is interested: in chrome, menu, settings, click show advanced settings at the bottom, passwords and forms, click manage passwords, now you can highlight and delete any saved passwords that you don't want saved for security reasons.