Does HMRC receive interest details directly from banks?

schiff

There was a point many moons ago that banks were obliged to complete slips (forms 8 (CB)) for interest of £15 or more to send to the Inland Revenue's (as it was then) local office. Searches were made in whatever records were available, and they were nothing like today's, to match a slip with the individual's returns district.

If the return didn't show the interest then the IR would actually take it up with the individual to collect the tax owing even if it was modest in amount - believe it or not! The opening enquiry letter was deliberately phrased vaguely - it is understood that you may have been credited with bank interest in the year which has not been shown on your tax return. And then if the reply said TSB £20 and the slip was for National Westminster all hell was let loose and a custodial sentence was on the cards!

So notifications to the Revenue are not new.