Interest details on HMRC Personal Tax Account. Updated to include how to access interest details.

Dazed_and_confused

It is no good comparing P2 and P800 values.

P800 should be the actual interest received (which is then either not subject to tax by virtue of spare Personal Allowance or is taxed at 0%, 0%, 20% or 40%)

The P2 figure is an adjustment to try and collect some additional tax during the year.

So for example say you have £1,250 interest and are due to pay 0% on £500 (savings nil rate) and 40% tax on £750.

Total tax due is £0 + £300 = £300

Your P2 adjustment will depend on what tax rate your main employer (or pension provider) will be deducting from your salary or pension. If this is just 20% then the tax code adjustment would be £1500 (so the employer collects an additional £300).

If you are paying higher rate on your wages/pension then the adjustment would be just £750 (x 40% = £300).

If you are actually due to pay tax on the interest at anything other than the additional rate of tax then it would be unusual to have say interest of £1,250 and a coding adjustment of £1,250

And if you are Scottish resident it could be a myriad of other amounts (Scottish residents only pay 0, 0, 20, 40 or 45% tax on interest but the tax code adjustment has to take account of the tax rate their employer or pension provider will be deducting tax under through PAYE).

schiff

"If you do find it again it is worth comparing the total for 2018:19 against the P800(?) you received for 2017:18. They will often be the same values used but as people provide updates for 2018:19 that will be less common"

My response was a direct reply to this - I got the impression that the figure they used for my current year code bore some relationship to the actual figure for 2017-18, hence my reply. Perhaps I misunderstood.

Dazed_and_confused

Your P2 will include an adjustment (reduction) to your tax code allowances.

But in your situation this isn't the amount of interest HMRC estimate you will receive, it is a specific adjustment to try and ensure x amount of additional tax is deducted.

So the adjustment will differ depending what tax rate you are paying under PAYE and also how much of the interest (upto £6,000 for some people) will be taxed at 0%.

In the absence of the full itemised list of accounts it may be worth looking in closer detail at your online P2 for 2018:19 on your Personal Tax Account. There may be a second figure available for the interest i.e. the interest income HMRC have used to ultimately arrive at the tax code adjustment.

schiff

We are at cross purposes. On the line entitled 'Less Untaxed Interest' there is a figure which is their estimate of the actual amount of interest they think will be credited this tax year, and WR nothing to do with an adjustment to collect tax as in the line further down entitled 'Less adjustment for estimated tax you owe (this year).

There is a figure on the latter line which is £108 but that bears no relationship to the £151.80 I am informed on the P800 for 2017-18 that I owe HMRC. £759 would be nearer the mark! Though I remain perplexed why it states (this year)

Dazed_and_confused

We aren't at cross purposes.

The entry

Less Untaxed Interest' there is a figure which is their estimate of the actual amount of interest they think will be credited this tax year,

Is a tax code adjustment to collect the tax due on the untaxed interest (for the tax year the tax code relates to).

Let's say you are a very straightforward higher rate payer with interest of £2,000.

The tax due on that would normally be calculated as
£500 x 0% = £0 (savings nil rate)
£1,500 x 40% = £600

If HMRC included the interest of £2,000 as a deduction in your tax code this would mean your employer/pension payer would usually deduct an additional £800 tax (£2,000 X 40%). £200 more than is actually due.

There is a figure on the latter line which is £108 but that bears no relationship to the £151.80 I am informed on the P800 for 2017-18 that I owe HMRC. £759 would be nearer the mark! Though I remain perplexed why it states (this year)

That is an adjustment to collect some additional tax due for the tax year the tax code relates, not an earlier tax year hence the "this year".

When your tax code reduces HMRC normally change it to an emergency (non cumulative) basis so the new tax only applies to any payments going forward, it doesn't consider what has been paid earlier in the tax year. This ensures you don't get a large lump of tax taken all in one go when the new tax code is first used. By also including this £108 element the new tax code is made slightly lower than it would otherwise be and tax owed from earlier in the same tax year starts to be paid between when the new tax code is first used and the end of the tax year.

But at the end of the day a tax code is just a provisional attempt to collect the correct amount of tax, there will be times when a full review needs to be done and a P800 issued to finalise things.

If you received a P800 for the 2017:18 tax year during the 2018:19 tax year then it would usually be your 2019:20 tax code which is used to collect the tax due. HMRC wouldn't change a tax code part way through the tax year to include tax owed from an earlier tax year.

polymaff

Another cogent case made for doing SA, telling HMRC not to code out - and ignoring the SNAFU Personal Tax Account.

badger09

polymaff wrote: »

Seriously - just after Osborne announced the end of taxation at source I was chatting with a senior in HMRC and I asked him why the complete change of policy - "came as a bombshell to us, too", and what HMRC was going to do about the cash-flow crisis that this change would inevitably cause - "We have plans that we'll announce to cover that" - and that has turned out to be this "shadow PoA" strategy running in parallel with the old PoA.


More "stealth" strategy.

That sounds eminently plausible. It isn't the first time a chancellor has announced a radical change in taxation without investigating the full consequences, and sadly, it won't be the last.

Someone at HMRC has to find a way to make it work, but its the poor staff on the frontline who have to deal with the fallout when it doesn't:(.

polymaff

badger09 wrote: »

Someone at HMRC has to find a way to make it work, but its the poor staff on the frontline who have to deal with the fallout when it doesn't:(.

Software specifications - in the real world - often demand the apparently impossible. In this case the performance specs aren't complicated at all - and the software designers have made a reasonable job of it (MAT excepted). The real log-jam is in communicating what the software implementation actually does. Two outcomes:

1. HMRC hopes that no-one will notice bad news - even though, eventually, the excrement hits the fan (like with this shadow PoA farce)

2. The staff within HMRC aren't trained and so "black magic" takes the place of understanding (as has been demonstrated by Marriage Allowance Transfer).

errr, that's "has been" as in "still is being".

SNAFU!

Fingerbobs

RG2015 wrote: »

The personal tax account can be accessed via the Government Gateway or the Gov.uk Verify portals as per the link below.

https://www.gov.uk/personal-tax-account

Once in click on the PAYE block and then click on check current tax year. You should then see a heading for your income from other sources with a sub section for untaxed interest income with a single figure. Below this is a link to view details. Click here and you will see a page with information on interest earned from your accounts.

Finally, at the foot of this page there is a link to check your account details and estimated interest.

Here is where I can see every savings account with individual amounts earned in the previous tax year, in this case 2017/2018.

Good luck, and if HMRC have not received and information from the banks I assume that these options will not be there for you.

HMRC definitely know about all of my savings interest because the total figures are shown under "Your detailed PAYE Income Tax estimate" but I can't get to the breakdown by individual account.


I have an "income from employment" section, but there is no "income from other sources" section.


On the right-hand side of the screen, under "Annual amounts" I can click on "what makes up your tax free amount" or "how your income tax is calculated" and both of these summaries include savings interest, and tax paid thereon, but I can't find the detailed breakdown.


Am I looking in the wrong places?

RG2015

Fingerbobs wrote: »

HMRC definitely know about all of my savings interest because the total figures are shown under "Your detailed PAYE Income Tax estimate" but I can't get to the breakdown by individual account.

I have an "income from employment" section, but there is no "income from other sources" section.

On the right-hand side of the screen, under "Annual amounts" I can click on "what makes up your tax free amount" or "how your income tax is calculated" and both of these summaries include savings interest, and tax paid thereon, but I can't find the detailed breakdown.

Am I looking in the wrong places?

It has changed and is now difficult to access. You need to log in to your personal tax account online and then follow the link below. Towards the foot of this page is a link to the details.

It is mad but it does work.

https://www.tax.service.gov.uk/check-income-tax/income/bank-building-society-savings