Monthly saver interest question

masonic

Chaykin wrote: »

Well I have one opened in June 2015 so I guess we'll see. I still suspect the bank will deduct tax for interest earned before 6th of April 2016 but I'd like to be mistaken! :-)

There's no need to wait. Just ask any higher rate taxpayer which tax year they include the interest in their tax return.

redux

masonic wrote: »

There's no need to wait. Just ask any higher rate taxpayer which tax year they include the interest in their tax return.

Or check old tax certificates and the respective accounts.

Whether interest was added in December, or October, or the end of March, the figures on the certificate are the same, without any effect of straddling across tax years.

masonic

http://www.hmrc.gov.uk/manuals/saimmanual/saim2440.htm

Interest ‘arises’ when it is received or made available to the recipient. Interest has been made available if it is credited to an account on which the account holder is free to draw.

Interest can in practice often be treated as arising when it becomes due and payable. However, if a taxpayer does not actually receive interest (or have it credited to an account) until a later date, it does not form part of his or her taxable income until it is received.

HTH

Chaykin

Thanks masonic, sorry to show my lack of knowledge... I think that the fact that you can already save tax free on monthly savers should be mentioned in MSE's regular savings guide - http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

Pincher

Would you believe it, got the letter from TSB today, basically they will not deduct tax from 6th April 2016.


On the other hand, I have been getting "NET INTEREST" monthly so far.


.....
2 Nov 2015 £6.87
1 Dec 2015 £6.22
4 Jan 2016 £7.29
1 Feb 2016 £6.01


So, if I had submitted an R85 in say October 2015, I would have got these paid gross, up to 4th April 2016.


Submitting an R85 now would mean I get the next two monthly payments paid gross.


1 March 2016
1 April 2016


And then it will all be paid gross any way.


For very low tax payers, if you don't submit the R85, you will have to claim the tax for March and April back: about £2 worth?
Hardly worth the effort and stamp.


It's not even worth the petrol (and parking) to go and submit the R85, if you didn't do it last time you were in the branch.

redux

Pincher wrote: »

Would you believe it, got the letter from TSB today, basically they will not deduct tax from 6th April 2016.


On the other hand, I have been getting "NET INTEREST" monthly so far.


.....
2 Nov 2015 £6.87
1 Dec 2015 £6.22
4 Jan 2016 £7.29
1 Feb 2016 £6.01


So, if I had submitted an R85 in say October 2015, I would have got these paid gross, up to 4th April 2016.


Submitting an R85 now would mean I get the next two monthly payments paid gross.


1 March 2016
1 April 2016


And then it will all be paid gross any way.


For very low tax payers, if you don't submit the R85, you will have to claim the tax for March and April back: about £2 worth?
Hardly worth the effort and stamp.


It's not even worth the petrol (and parking) to go and submit the R85, if you didn't do it last time you were in the branch.

Why submit a form physically? Just a phone call request may work.

Also, the declaration affects the whole year, not just subsequent months.

n.b. to clarify and avoid confusing other people, in this post we are talking about monthly interest on the bank account, and this doesn't affect the monthly saver.

Pincher

The tax is either paid gross or claimed back.
It's just which way is less faffing around.
For how much? 5% on £2,000 is £100, 20% on that is £20.