Demand for tax on untaxed interest

badger09

00ec25 wrote: »

I thought you might fail that test

if you fill out the questionnaire in such a way that the end result is no you do not have to do a tax return, the last bit at the bottom of the final page contains the info i have quoted because that is the fall back position for someone who is not required to do the full horrors of a tax return, but nonetheless has not paid tax on income they have received and so still have a duty to inform HMRC of that fact and pay the tax due on it.

That questionnaire showed that I should complete SA Return because I need(ed) to pay tax on £2500 or more in interest.

Which is at odds with the £10k figure mentioned here, https://www.gov.uk/apply-tax-free-interest-on-savings
which is what I had understood the position to be

As a retired Snr Inspector of Taxes, I'm well aware of my duty to inform HMRC about, and pay tax due on, my untaxed interest;). Unfortunately I've had to write several times, and escalate to a formal complaint, to persuade HMRC to correct its many errors concerning that interest.

Dazed_and_confused

As far as untaxed interest is concerned my understanding was that it is the £10k figure which is relevant as far the requirement for a Self Assessment return is concerned.

Sadly gov.uk is not the reliable source it should be.

For example the insistence on referring to the Personal Savings Allowance (admittedly a confusing name) as an allowance and not a tax rate/band is a perfect example of this.

MoneySavingTart

Apart from the format of the calculations, does it make any difference if the PSA is treated as an allowance or a zero rated band?

MST

Pennywise

MoneySavingTart wrote: »

Apart from the format of the calculations, does it make any difference if the PSA is treated as an allowance or a zero rated band?

MST

At certain income levels and at certain splits of that income, yes, very much matters.

unholyangel

My understanding is that the 10k is the limit for savings & investment income (dividends, savings interest etc).

The 2.5k limit is for other interest (aka interest that is not paid on savings & investments).

badger09

unholyangel wrote: »

My understanding is that the 10k is the limit for savings & investment income (dividends, savings interest etc).

The 2.5k limit is for other interest (aka interest that is not paid on savings & investments).

That had always been my understanding.

However, the questionnaire about whether SA Return is needed or not, omits the word 'other' before 'interest'.

badger09

Dazed_and_confused wrote: »

As far as untaxed interest is concerned my understanding was that it is the £10k figure which is relevant as far the requirement for a Self Assessment return is concerned.

Mine too. Hence my confusion over the Questionnaire.

Dazed_and_confused wrote: »

Sadly gov.uk is not the reliable source it should be.

I nominate that sentence for "Understatement of the Year".

unholyangel

badger09 wrote: »

That had always been my understanding.

However, the questionnaire about whether SA Return is needed or not, omits the word 'other' before 'interest'.

Yeah I had a look earlier and it does appear their "checker" is misleading. All they need to do is put (excluding savings interest) after it.

I've went back and clicked on the something wrong with this page link at the bottom right and asked them to clarify - lest they want to create more work for themselves.