Declaring tax on money which has gained interest over a period of time

SpethHimme

I recently received a sum of money from the company I work for being acquired and the shares being paid out to employees. The amount paid to my bank account was not taxed as I agreed I would declare the tax from my end in the next tax year.
Until the time when I have to pay back the tax (April 2021), the money will be sitting in a direct saver account and will accumulate interest.
When it comes to the time that I have to declare and pay back the tax, do I also need to pay back the interest, or do I have to calculate a certain percentage of the interest which also needs to be paid back?

badmemory

Are you sure it is April 2021 & not Jan 2021?

HHarry

The original payment and the interest both have to be declared on your tax return, but will be treated differently.
Not sure how the original payment will be classed as it’s come from a share option, but assume it’ll be taxed at your usual 20 or 40%.
You can earn £1000 worth of interest (depending on your tax rate) before paying any tax.

Dazed_and_C0nfused

SpethHimme said:

I recently received a sum of money from the company I work for being acquired and the shares being paid out to employees. The amount paid to my bank account was not taxed as I agreed I would declare the tax from my end in the next tax year.
Until the time when I have to pay back the tax (April 2021), the money will be sitting in a direct saver account and will accumulate interest.
When it comes to the time that I have to declare and pay back the tax, do I also need to pay back the interest, or do I have to calculate a certain percentage of the interest which also needs to be paid back?

If you have already received  the money do you mean declare it in your next tax return i.e. the return for 2019:20?

In which case the tax would be payable on 31 January 2021.

You don't have to "pay back" the interest.

You need to declare the interest in the tax return it is paid in.  So if you receive interest annually and it is paid on say 30 March each year then on your 2019:20 return you declare the interest paid on 30 March 2020.

And on your 2020:21 return you declare the interest paid on 30 March 2021.

The amount of tax payable on the interest depends on what other taxable income you have in that particular tax year.