Personal saving allowance: Do you still need to declare bank interest on a Self Asses

Nick_C

mgdavid wrote: »

OK - but do people still have that, other than inside a SIPP or an ISA?

Indeed we do. About 1/3 of my shares are not in an ISA wrapper.

Many people who have shares don't think ISAs offer any benefit. If you have less than £100K in a share account your dividends are likely to be below £5K so no tax to pay in most cases.

I only started putting shares into an ISA wrapper when I found I had to stop trading in January a few years ago, otherwise I would have gone over the CGT limit for that year. (Nice problem to have of course.)

wookie6

Having read the above replies, I think I'm now more confused than I was! :sad:

Can some help me get my head around this, for example:

1) If I am a basic (20%) tax rate payer and I have never had to file a self assessment then I assume this is fine as interest paid on any money in bank accounts would already have had the basic (20%) tax taken off before it was payed to me. Is this correct?

2) If I am a new higher (40%) tax rate payer and I have never had to file a self assessment then do I need to start filling a self assessment for any interest paid on any money in bank accounts in a given tax year, as only the basic (20%) tax was taken off before the interest was paid to me?

3) Assuming the answer to question 2 is yes, presumably this is the interest earned within a given tax year from any type of bank account (current, savings etc) excluding ISA's?

badmemory

You will probably get a more detailed answer tomorrow but for now -

If you are talking about the last tax year then yes, yes (or maybe a phonecall will do) & yes.

If you are talking about the tax year which starts in april then the answers would be 1) yes unless you have earned over £1000 interest. 2) no SA if you earned under £500 interest unless you need one for another reason of course. 3) yes

wookie6

badmemory wrote: »

You will probably get a more detailed answer tomorrow but for now -

If you are talking about the last tax year then yes, yes (or maybe a phonecall will do) & yes.

If you are talking about the tax year which starts in april then the answers would be 1) yes unless you have earned over £1000 interest. 2) no SA if you earned under £500 interest unless you need one for another reason of course. 3) yes

Thanks for the info, thats really helpful. Can you point me to some info on the changes related to 1) and 2) within the 2016 - 2017 tax year?

Edit: Ignore that just found this - http://www.thisismoney.co.uk/money/saving/article-3010018/Has-Chancellor-George-Osborne-s-radical-Budget-reform-killed-cash-Isa.html

polymaff

wookie6 wrote: »

Thanks for the info, thats really helpful. Can you point me to some info on the changes related to 1) and 2) within the 2016 - 2017 tax year?

Edit: Ignore that just found this - http://www.thisismoney.co.uk/money/saving/article-3010018/Has-Chancellor-George-Osborne-s-radical-Budget-reform-killed-cash-Isa.html

Try this:

http://forums.moneysavingexpert.com/showpost.php?p=70422918&postcount=9

Although written about a year ago, it has the right figures!

I hope

mgdavid

polymaff wrote: »

You know that they may do, David.

Don't panic. It's not a hanging offence to make mistakes on MSE.
Or is it? .............

it is to me, I absolutely detest being wrong.:)

wookie6

As an aside I'm sure loads of people move from being basic rate tax payers into the higher rate band but don't even know they have had to do this for this years tax return and previous years!

Surely communication on this had to be better as otherwise its seriously unfair on the people that have paid tax on their interest as higher rate tax payers.

BarGin

Sorry to bring back an old thread but I hope someone can help me with a question I'm struggling to find a definitive answer to.

I am a pensioner receiving the state pension and a couple of small private ones. I have savings in several banks to maximise interest. I don't fill in a tax return.

Do I have to notify HMRC of all the various interest I receive or do the banks send this information to them directly?

badmemory

HMRC are actually stopping a lot of state pensioners from having to file SA anyway.

What should be happening is that they will get all the info direct. Your state pension from DWP, P60s from your private pensions & also the interest you have received tax free from your savings etc. The only input from you should be to check that their figures are correct.

It is our responsibility to check that we are paying the correct tax not HMRCs.

pavane

HMRC don't get interest information from banks, at least not for the purposes of tax assessment, why would it be any different for a pensioner?