Does HMRC receive interest details directly from banks?

intalex

Hi,
I seem to recall reading a while ago that banks would report saving interest payment details directly to HMRC at the end of the tax year, effective 16/17 tax year.
This would obviously be handy as I wouldn't have to keep track of my interest tax certificates to do my self-assessment, but is this true or did I mis-read it?
Thanks in advance,
I

Dazed_and_confused

It is true that they will get the information, see section 7 in the link below, but that doesn't alter anything for self assessment returns, you still have to complete that as normal (declaring all of the interest as it's all still taxable income, just some may now be taxed at 0%)

https://www.gov.uk/government/publications/personal-savings-allowance-factsheet/personal-savings-allowance

ColdIron

You'll still need to track your tax certificates unless you think HMRC are infallible and may not be able to escape self assessment. It probably depends on the figures involved and why you are completing a self assessment already

You don’t need to do anything to claim your Personal Savings Allowance.
If you’re a basic rate taxpayer and have savings income or interest of more than £1,000 (£500 for higher rate taxpayers), you’ll have to pay some tax on this. But you don’t need to do anything yet.
HMRC will normally collect the tax by changing your tax code. Banks and building societies will give HMRC the information they need to do this.
If you fill in a Self Assessment tax return you should carry on doing this as normal.

You could have a look at this, I've yet to find anything useful regarding untaxed interest in it
https://www.gov.uk/personal-tax-account

Or this thread may be worth a read
https://forums.moneysavingexpert.com/discussion/5342041

intalex

Thanks both, agreed I can't take any such figure on face value, but sometimes a reasonableness check can be sufficient and save time.

It's a real pain keeping track of tax certificates, particularly with any accounts closed during the year, which happens so often these days with a constant scramble for a little bit more interest.

Anyway, hopefully they consider something like this for the future, even if it's just displayed on the online HMRC account, the way they've more recently started doing for employment income.

greenglide

I wouldn't have to keep track of my interest tax certificates to do my self-assessment

If you can't remember these things simply maintain a spreadsheet of interest received when accounts are closed. It is easier now because there is no longer any tax deducted.

It has always been the responsibility of the tax payer to maintain records of these things and report them accurately to HMRC and year end if required.

TheTracker

The day will come where individuals don't need to tell HMRC what money they've earnt from sources that also have responsibility of informing HMRC that such money has been paid. It would require 1990s technology to do this, so I reckon that in 2017 we are only about 3-8 years away from UK gov catching up with 1990.

bowlhead99

TheTracker wrote: »

The day will come where individuals don't need to tell HMRC what money they've earnt from sources that also have responsibility of informing HMRC that such money has been paid. It would require 1990s technology to do this, so I reckon that in 2017 we are only about 3-8 years away from UK gov catching up with 1990.

With 1990s technology it would be pretty slow to reliably do the matching necessary on the tens of millions of accounts for which the bank only knows that the accountholder is (e.g.) Mr J Smith who at one time or another lived at 1 High Street, which may not be an address that HMRC uses for Mr Smith.

With the relatively recent change of regulations that require banks to routinely collect tax ID numbers at point of account opening, the data quality will improve. So once we have good data and agood technology implementation, you could probably trust the data being fed automatically from source to tax authority, but understandably we're not there yet.

So you're always better reporting the amount you know you earned, rather than rely on someone else to report what they paid someone with your name and hope HMRC match it all up in a huge database with layers of semi-automated review and repair.

intalex

I just finished collating all my interest for the tax year just ended, which took me a few hours. There are at least 3 closed accounts I had earned interest on and which were completely absent from my memory but which I was reminded of through spotting inter-bank transactions in other accounts which are still open, whilst going through interest transactions for these.

I work with data for a career and probably shouldn't have asked the question in the first place - after all, technology is based on science, not magic!

bowlhead99

intalex wrote: »

I work with data for a career and probably shouldn't have asked the question in the first place - after all, technology is based on science, not magic!

Yet when you want a promotion and your boss asks why he shouldn't just replace you with a robot, you'll perhaps tell him that data management, analysis and interpretation is at least as much art as science...

I must say, I prefer to read the rules for myself and do my own calculations and checks, rather than leave it up to HMRC software or HMRC employees to work it out

Rollinghome

bowlhead99 wrote: »

With 1990s technology it would be pretty slow to reliably do the matching necessary on the tens of millions of accounts for which the bank only knows that the accountholder is (e.g.) Mr J Smith who at one time or another lived at 1 High Street, which may not be an address that HMRC uses for Mr Smith.

Could be fun. May be as well for Mr J Smith to avoid naming any of his sprogs 'J Smith' or at least to store them at a different address.

schiff

intalex wrote: »

I just finished collating all my interest for the tax year just ended, which took me a few hours. There are at least 3 closed accounts I had earned interest on and which were completely absent from my memory but which I was reminded of through spotting inter-bank transactions in other accounts which are still open, whilst going through interest transactions for these.

I work with data for a career and probably shouldn't have asked the question in the first place - after all, technology is based on science, not magic!

I log my interest as it is received on a spreadsheet and by clicking on a point to the left of the column totals it tells me, at any point in the calendar, how much I've received. Probably takes me a few hours over the year but it's spread out!