Forum Home» Savings & Investments

Interest details on HMRC Personal Tax Account. Updated to include how to access interest details. - Page 9

New Post Advanced Search

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

edited 2 October 2019 at 5:27PM in Savings & Investments
483 replies 66.2K views
1679111249

Replies

  • SpiggleSpiggle Forumite
    1.8K posts
    Tenth Anniversary 1,000 Posts Name Dropper
    ✭✭✭
    You have to have income of at least £16,850 before you can benefit from the Personal Savings Allowance (really a 0% tax rate). ...

    Yes but the savings starter rate of tax comes in between them. That allows upto £5,000 of interest to be taxed at 0%. The savings nil rate (known as the Personal Savings Allowance) only applies after the Personal Allowance and savings starter rate band have been used up.

    Using 2017:18 figures as an estimate for 2018:19 is quite normal. And it also quite normal to show the interest income in your tax code if you are not going to pay tax on the pension or employment income the tax code relates to.

    I think you're concern is probably unfounded. Does the tax code applied to either the original or new LGPS pension mean you will be paying tax on either pension?

    Hi Dazed and confused,
    Do you mean I have to have pension (or earnings) over £16,850 to benefit from the £1000 PSA nil rate or the £5000 Savings Starter Rate (nil rate) please?
    I realise that the only way to calculate is to estimate based upon last year's returns notifications from institutions until annual returns for 18-19 are produced.
    Whether I pay tax for this year seems irrelevant insomuch as my code has been reduced from the PA of £11850 to £11287. This will not cause me difficulty in 18-19.
    However, if they calculate in the same way for 19-20, when my combined pension income will exceed the personal allowance and I will be receiving higher interest returns, such a reduction calculated in the same way i.e. taken off my tax free PA is going to affect my tax code and result in me paying unnecessary tax that I need to act upon.
    Malchester wrote: »
    Oh the intricacies of HMRC. My earned / DB pension income this tax year is less than my personal allowance. I also have interest greater than £1000. Should not pay tax. Hmrc changed my tax code to gather tax from interest over £1k even though should not pay it. First person I spoke to denied there was such a thing as the £5000 starter allowance. Next person sorted it out but only by fiddling with tax code. He said the system could not cope with those whose income is less than personal allowance but interest is greater than £1k. He said ring back after 4 Feb when they should have it sorted. Have left it and will ring back next week

    Thanks Malchester, looks like I'm back to the hell of dealing with HMRC for months then. The last time they messed about like this it took months to sort out, multiple phone calls, letters, cheques to pay theoretically unpaid tax, more letters, and then finally rebate by cheque from HMRC of more than we paid out in theoretically unpaid tax. (We were both still on PAYE, as I am today but we paid because my late husband couldn't cope with 'owing' tax and HMRC systems repeatedly tried to put us on a Self Assessment basis, I was recovering from open heart surgery and my late husband had begun the steady decline in health that leaves me alone today.)
    Are you able to tell us if the tax codes you believed to be wrong would have actually resulted in tax being deducted from your earnings or pensions.

    I am not convinced your tax codes were actually wrong in the first place or that the second HMRC person understood how their own tax code system works. Or that there is anything to sort out.

    Please see my comment above D&C, this is not currently about paying tax in 18-19 but what will happen in two months when we hit the new TY.
    I'm trying to get a handle on what can be earned in interest payments before they are listed as deductions from the overall PA. You seem to be indicating that I should allow the deduction from my PA taking it below the threshold and then reclaim later.

    All I have read on here and HMRC indicates that everyone can earn up to £1000 in earned savings interest at the 0% rate. The saver starting 0% rate of £5k you say above is before the application of PSA which indicates even more that any untaxed interest should not be used to calculate a reduced
    'Total tax-free amount'. I have no problem with the amount of untaxed earned interest being shown on my tax code notice, it is how it is listed as a deduction against my PA and the effect it will have on 6 April 2019 I am concerned about.

    If I am the second person you refer to, I do understand the tax code system to some extent. What I'm struggling with, having never been in a position previously to be in danger of exceeding SSA or PSA, is how the savings starter rate and/or personal savings rate is applied e.g. Note 2 on the untaxed interest states:
    "This is an estimate ... based on the previous year. The amount we have included takes into account any Starter Savings Rate or Personal Savings Allowance you are entitled to. If the amount due is more than your Starter Savings Allowance or Personal Savings Allowance we will deduct this by reducing your tax-free allowance so you pay tax on the interest. ..."
    And the bolded section is the part that caused me to post. I do not expect to have my PA/tax code increased by the SSA or PSA but equally I do not expect just over £560 in interest pa to be deducted from my PA when it is clearly inside both the SSA and PSA limits. I need to understand this particular aspect before we get to the new TY.

    TIA for any illumination you may offer.

    All the best,
    Spigs
    Mortgage Free October 2013 :T
  • 20102010 Forumite
    4.4K posts
    Tenth Anniversary 1,000 Posts Photogenic I've been Money Tipped!
    ✭✭✭✭
    I only logged in to my PTA yesterday to see what was there as I received a letter saying I owe tax on savings.
    In the tax year 18/19 which has not ended yet all my savings and interest are listed from the previous tax year.
    I would have thought that this info should have been in tax year 17/18, which shows no savings accounts at all.
    I would have thought that this tax year would remain blank until the banks and B/Soc forward the info in August.

    Anyway, some of the account are now closed but when I tried to remove them I got the "tech problems try again later".

    The only two I did manage to alter were at Virgin money and then it said it would take three weeks to change.

    I know the system is only beta but hopefully it might improve over time so that you can actually make amendments.
  • colstencolsten Forumite
    14.8K posts
    10,000 Posts Sixth Anniversary Photogenic Name Dropper
    ✭✭✭✭✭
    2010 wrote: »
    I only logged in to my PTA yesterday to see what was there as I received a letter saying I owe tax on savings.
    In the tax year 18/19 which has not ended yet all my savings and interest are listed from the previous tax year.
    I would have thought that this info should have been in tax year 17/18, which shows no savings accounts at all.
    I would have thought that this tax year would remain blank until the banks and B/Soc forward the info in August.

    Anyway, some of the account are now closed but when I tried to remove them I got the "tech problems try again later".

    The only two I did manage to alter were at Virgin money and then it said it would take three weeks to change.

    I know the system is only beta but hopefully it might improve over time so that you can actually make amendments.
    It's how it's supposed to work - they assume you continue to get your previous year's interest. If you know you won't, just call them and tell them. They can adjust your tax code. They've done this for me.
  • 20102010 Forumite
    4.4K posts
    Tenth Anniversary 1,000 Posts Photogenic I've been Money Tipped!
    ✭✭✭✭
    colsten wrote: »
    It's how it's supposed to work - they assume you continue to get your previous year's interest. If you know you won't, just call them and tell them. They can adjust your tax code. They've done this for me.

    Surely when this tax year`s interest info is sent to them later in the year, they`ll update it and remove any accounts that no new interest info is sent.

    Of course if the online PTA worked correctly you could do it yourself.
  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
    ✭✭✭✭
    Do you mean I have to have pension (or earnings) over £16,850 to benefit from the £1000 PSA nil rate or the £5000 Savings Starter Rate (nil rate) please?

    The £1,000 savings (PSA) nil rate.

    The £5,000 savings starter rate comes after the Personal Allowance but is reduced pound for pound by any taxable wages/pension/rents etc over £11,850.

    Once this hits £16,850 the savings starter rate is lost.

    You can get both the savings starter rate and savings nil rate if your earned/pension income is low enough.
  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
    ✭✭✭✭
    However, if they calculate in the same way for 19-20, when my combined pension income will exceed the personal allowance and I will be receiving higher interest returns, such a reduction calculated in the same way i.e. taken off my tax free PA is going to affect my tax code and result in me paying unnecessary tax that I need to act upon.

    Why do you think that would happen? You are comparing apples and pears. If your total pension income was greater than your Personal Allowance there would be no spare allowances to be set against the savings interest. The interest deduction (if one was required) should then just ensure that the correct additional tax was deducted in respect of the savings interest i.e. taking into account any savings starter rate and savings nil rate available.
  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
    ✭✭✭✭
    You seem to be indicating that I should allow the deduction from my PA taking it below the threshold and then reclaim later.

    Not at all. By your own admission there seems to be no expectation that any incorrect tax will be deducted in 2018:19.

    Have you received your 2019:20 tax code yet?

    If you have an believe it to be wrong the first thing you should do is ensure HMRCs estimate of your pension income is accurate for that tax year. If not correct that and only that and then review the tax code again.

    If you still think it will deduct excessive tax then post the details so we can try and work where the problem lies.
  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
    ✭✭✭✭
    All I have read on here and HMRC indicates that everyone can earn up to £1000 in earned savings interest at the 0% rate.

    That simply isn't true. Some can earn £17,850 in interest before paying tax on it.

    Others will have to pay tax on £1 of interest.

    The £1,000 savings nil rate is not something people with low incomes can benefit from. It simply does not apply until you have income over £16,850 (current tax year).
  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
    ✭✭✭✭
    If I am the second person you refer to, I do understand the tax code system to some extent.

    Sorry, that was in response to Malchester's post and the it was the second HMRC person they spoke to.
  • Elvie100Elvie100 Forumite
    74 posts
    Fifth Anniversary 10 Posts Name Dropper
    Is anyone else missing interest details from their Club Lloyds, TSB Classic Plus and BOS accounts? Lloyds have reported the Regular Saver, but not the current accounts (sole and joint).

    I have received a letter telling me I owe HMRC for untaxed interest. The PTA tells me I can either pay it online or it will be deducted via my tax code for 2019-20 but they have already sent the new code to my employer for this year and it has been applied for February (on a month 1 basis). I am not disputing I owe them money, but it should be more than they say. Do I add the interest via the Tell Us About Other Income section? It says this tax year or next tax year, not for 2017-18. Perhaps over the phone?
    MFW#60
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support