ISA interest & hmrc

Aidanmc

Is it necessary to declare interest gained on Cash Isa on Self Assessment forms. Also what about dividends and income on S&S Isa?
I need to do SA as im self employed.

Reed_Richards

No and no. ISAs are free from all taxation and do not need to be declared to HMRC. They're worth it for the saving on form-filling alone, you might think.

colsten

https://www.gov.uk/individual-savings-accounts/how-isas-work

Rich2808

Unless of course you had an ISA with Al Rayan bank - but that is another story!

colsten

Rich2808 wrote: »

Unless of course you had an ISA with Al Rayan bank - but that is another story!

It still doesn't need to be declared. The fact that Al Rayan reported ISA interest/profit to HMRC is a different issue, isn't it?

Aidanmc

Rich2808 wrote: »

Unless of course you had an ISA with Al Rayan bank - but that is another story!

Actually it was with Al Rayan last tax year!

colsten

Aidanmc wrote: »

Actually it was with Al Rayan last tax year!

If your interest on the ISA brings you over your personal savings interest allowance (SIA), you need to speak to HMRC and have the ISA profit taken off your taxable income. If your total interest incl. the profit on the Al Rayan ISA is below the SIA, it's all a bit academic.

Aidanmc

colsten wrote: »

If your interest on the ISA brings you over your personal savings interest allowance (SIA), you need to speak to HMRC and have the ISA profit taken off your taxable income. If your total interest incl. the profit on the Al Rayan ISA is below the SIA, it's all a bit academic.

The SIA is £1000 ? My total interest is way less than that!

Dazed_and_confused

There is no actual allowance for savings interest.

It is either tax exempt (ISA's) or taxable.

Depending on what level of self employment profit you have and any other earnings or pension income then you can have upto £6,000 taxable savings interest which will be taxed at 0%.

If your profit, wages, pension income etc exceeds £17,500 then this will be limited to £1,000 taxed at 0%.

If you are classed as a higher rate payer then it will be a maximum of £500 taxed at 0%.

But even when taxed at 0% the taxable interest can, in a few situations, still increase your overall tax liability.

colsten

Dazed_and_confused wrote: »

There is no actual allowance for savings interest.

There is. https://www.gov.uk/apply-tax-free-interest-on-savings

colsten

Aidanmc wrote: »

The SIA is £1000 ? My total interest is way less than that!

It depends on your tax band.


Basic rate £1,000
Higher rate £500
Additional rate £0