tax return - interest on savings

Mick70

Hi,
I am aware you have to disclose any interest on savings etc in your self assessment tax return , my query is this.
If all savings in one account in a one year fixed account , opened june 20 - matures june 21 - apparently they don't do annual tax statements ?  the interest is added on maturity , but if log on the account it gives "predicted" interest of £1037 for june 21.

My query is,  can i disclose this in my 2019/20 tax return, as most of it relates to 2019/20.
If I leave it and show it in next years return, 2021/22 ,  then it is likely to be reinvested and more interest on top of that to disclose which will needlessly increase tax charges, I think , as only have a certain allowance 

many thanks
mick

zagfles

If the interest wasn't paid or added to the account last year, there's nothing to declare. It'll all be taxable this tax year because it'll be paid this tax year.

Mick70

zagfles said:

If the interest wasn't paid or added to the account last year, there's nothing to declare. It'll all be taxable this tax year because it'll be paid this tax year.

problem is most banks give you a tax statement so you can declare it , if it is only giving me predicted intest to mature in june that means could get a double wammy next tax year ? as would then need to declare that and any other interest when reinvested

[Deleted User]

Mick70 said:

zagfles said:

If the interest wasn't paid or added to the account last year, there's nothing to declare. It'll all be taxable this tax year because it'll be paid this tax year.

problem is most banks give you a tax statement so you can declare it , if it is only giving me predicted intest to mature in june that means could get a double wammy next tax year ? as would then need to declare that and any other interest when reinvested

Mick - I have answered your query on the SEISS grant on the other thread.

zagfles

They give you a statement based on interest paid, not interest accrued but not yet paid!

If you reinvest it in another 1 year fix paying interest at the end of term, that interest will be paid in the 2022/3 tax year. If you invest it in some account paying monthly interest or that pays interest on a particular date eg 31 Dec then some may be taxable this year. You need to account for the interest payment dates when opening the account if you want interest to be taxable in a particular tax year.

Ammah45

Hi all. 
Instead of opening a new thread, I thought I will just add here. 

I have been receiving some interest on an instant access savings account over the last few months. I am a higher rate tax payer but I don't think the total interest is anywhere near my £500 allowance. Don't banks inform HMRC of interest automatically so that I don't have to do it? I want avoid doing a tax return if I can because other than this, I have no income outside PAYE.

Thanks

molerat

Banks inform HMRC of interest paid for the tax year, you do not usually need to inform HMRC yourself.  There are some accounts that are not reported though, generally where saving through a third party, but that can be declared in a semi-formal way.  A tax return is only needed if your interest is over £10K or HMRC tell you to.

Ammah45

molerat said:

Banks inform HMRC of interest paid for the tax year, you do not usually need to inform HMRC yourself.  There are some accounts that are not reported though, generally where saving through a third party, but that can be declared in a semi-formal way.  A tax return is only needed if your interest is over £10K or HMRC tell you to.

Thanks. I had a message from HMRC saying I should submit a tax return and I have no idea why. My salary was well below 100k last year with no other earnings. I had to do one last year though as I had some earnings outside PAYE, so maybe they automatically sent a message for that. 

uknick

Ammah45 said:

molerat said:

Banks inform HMRC of interest paid for the tax year, you do not usually need to inform HMRC yourself.  There are some accounts that are not reported though, generally where saving through a third party, but that can be declared in a semi-formal way.  A tax return is only needed if your interest is over £10K or HMRC tell you to.

Thanks. I had a message from HMRC saying I should submit a tax return and I have no idea why. My salary was well below 100k last year with no other earnings. I had to do one last year though as I had some earnings outside PAYE, so maybe they automatically sent a message for that. 

Have you told HMRC the additional earnings were a one off?  If not they'll keep on asking for one.  Even then, I'd expect them to want one for at least the year after you tell them the earnings won't be repeated.

Ammah45

uknick said:

Ammah45 said:

molerat said:

Banks inform HMRC of interest paid for the tax year, you do not usually need to inform HMRC yourself.  There are some accounts that are not reported though, generally where saving through a third party, but that can be declared in a semi-formal way.  A tax return is only needed if your interest is over £10K or HMRC tell you to.

Thanks. I had a message from HMRC saying I should submit a tax return and I have no idea why. My salary was well below 100k last year with no other earnings. I had to do one last year though as I had some earnings outside PAYE, so maybe they automatically sent a message for that. 

Have you told HMRC the additional earnings were a one off?  If not they'll keep on asking for one.  Even then, I'd expect them to want one for at least the year after you tell them the earnings won't be repeated.

No, I don't think I did. 

I wondered if there is a question about earnings from savings in the tax return form. I don't remember. 

uknick

Ammah45 said:

uknick said:

Ammah45 said:

molerat said:

Banks inform HMRC of interest paid for the tax year, you do not usually need to inform HMRC yourself.  There are some accounts that are not reported though, generally where saving through a third party, but that can be declared in a semi-formal way.  A tax return is only needed if your interest is over £10K or HMRC tell you to.

Thanks. I had a message from HMRC saying I should submit a tax return and I have no idea why. My salary was well below 100k last year with no other earnings. I had to do one last year though as I had some earnings outside PAYE, so maybe they automatically sent a message for that. 

Have you told HMRC the additional earnings were a one off?  If not they'll keep on asking for one.  Even then, I'd expect them to want one for at least the year after you tell them the earnings won't be repeated.

No, I don't think I did. 

I wondered if there is a question about earnings from savings in the tax return form. I don't remember. 

There is a question about savings income, but that's not why they send you a request for SA.

They'll keep on asking for one until they think they've got every last bit of blood tax from you.  Same thing happened to my partner who had a one off of savings income that took her into tax paying area.  She ended up doing 5 returns, 4 of which had no tax to pay, until they told her not to do another.