TERRIBLE TIME WITH HMRC. DOUBLED MY INTEREST ON SAVINGS

andy_poulton

I have been declaring the interest earned on my cash savings accounts since day one.
 [Now believe 33% of the country do not know, 33% dont care, then 33% like me trying to do the right thing.]

Originally I just told them the amounts. They told me [at that time] Banks and societies were not informing them. So then the wanted all the details of the accounts etc etc. They are now and have for about 3 years [I did not know]
We have had underpayments of £400 and over payments of various amounts [£139, £70, £14 etc for both of us [joint accounts] I got worried when they told me I had 15 Coventry accounts [all with 16 digit references ALL ZEROS] The advisors were adamant all live with money in them [I had 3 usually up to 5 including closed in tax year.]
I accessed my PTA today as I had just sent them the figures. Could not believe the PTA amounts. [My Personal Tax Account is stuck in BETA read only, Cannot send or upload]
I contacted HMRC and this time they were extremely honest with me and simply divulged all the accounts and figures. [They refused before and were very cagey???]
YES you guessed all doubled. Using MY figures and those from the institutions.. They are trying to delete my figures and leave the others to work out how much they owe us.
BONKERS I am in my late 70's and this was a nightmare to try and sort out. Dread to think then what my future holds. I envy 66% of the country then not doing this. I told them I am stopping send MY figures [THEY ASKED ME ORIGINALLY AND SENT THE FORMS !!]
They answer was okay fine. WOW.

HansOndabush

We also have HMRC issues over untaxed interest. As I understand it everyone has a £1,000 tax-free allowance against untaxed interest. Why then do HMRC keep deducting 'untaxed interest' of a few hundred pounds from my wife's tax code notification meaning she doesn't get her full personal allowance even though she has never been anywhere near earning £1,000 of interest in any tax year? This seems to happen every tax year and takes a lot of faff to sort out.

We have raised this with HMRC and was supposed to have a reply within 3 weeks but that deadline came and went about a fortnight ago and there seems to be no progress on it.

andy_poulton

HansOndabush said:

We also have HMRC issues over untaxed interest. As I understand it everyone has a £1,000 tax-free allowance against untaxed interest. Why then do HMRC keep deducting 'untaxed interest' of a few hundred pounds from my wife's tax code notification meaning she doesn't get her full personal allowance even though she has never been anywhere near earning £1,000 of interest in any tax year?

Well they told ME that until someone updats them they carry on assuming it the same amount of interest every year. So that is what they did to me and I run about 2 years late. This year they will owe me again with the p/poor rates.

Dazed_and_C0nfused

HansOndabush said:

We also have HMRC issues over untaxed interest. As I understand it everyone has a £1,000 tax-free allowance against untaxed interest. Why then do HMRC keep deducting 'untaxed interest' of a few hundred pounds from my wife's tax code notification meaning she doesn't get her full personal allowance even though she has never been anywhere near earning £1,000 of interest in any tax year? This seems to happen every tax year and takes a lot of faff to sort out.

We have raised this with HMRC and was supposed to have a reply within 3 weeks but that deadline came and went about a fortnight ago and there seems to be no progress on it.

There is no "allowance" for interest.  There are two 0% tax bands though for interest.

I suspect you are concerning yourself about something which is actually correct and has no impact on your wife.

If her earnings/pension income is less than her Personal Allowance then the rest of her unused Personal Allowance will be used up by the interest, hence the tax code deduction.  Perfectly normal and correct in most instances.

She can only make use of the £1,000 savings nil rate band (aka Personal Savings Allowance) if her total taxable income exceeds a minimum of £16,310 (often £17,570).

What is her tax code and how much do you expect her to get paid in the current tax year by the employer/pension company who are using the tax code?  The taxable pay figure which will be shown on her P60.

zagfles

HansOndabush said:

We also have HMRC issues over untaxed interest. As I understand it everyone has a £1,000 tax-free allowance against untaxed interest. Why then do HMRC keep deducting 'untaxed interest' of a few hundred pounds from my wife's tax code notification meaning she doesn't get her full personal allowance even though she has never been anywhere near earning £1,000 of interest in any tax year? This seems to happen every tax year and takes a lot of faff to sort out.

We have raised this with HMRC and was supposed to have a reply within 3 weeks but that deadline came and went about a fortnight ago and there seems to be no progress on it.

It's a job creation scheme at HMRC. If they just invested a bit in updating the PAYE system to deal with untaxed interest properly it'd save all this hassle.

colsten

andy_poulton said:

 [Now believe 33% of the country do not know, 33% dont care, then 33% like me trying to do the right thing.]

Where do you have those numbers from?

HansOndabush said:

.As I understand it everyone has a £1,000 tax-free allowance against untaxed interest. 

BR tax payers have a £1,000 Personal Savings Allowance. For HR tax payers it is £500, and AR tax payers get £0.

HansOndabush said:

Why then do HMRC keep deducting 'untaxed interest' of a few hundred pounds from my wife's tax code notification meaning she doesn't get her full personal allowance even though she has never been anywhere near earning £1,000 of interest in any tax year? This seems to happen every tax year and takes a lot of faff to sort out.

Your wife, like all other UK income tax payers, can update her expected income online, in her Personal Tax Account. In my experience, updates get processed very quickly, and the tax code gets adjusted as necessary.

It's annoying that HMRC won't any longer show us what the banks report to them, and there is a massive long thread on this board about it. There is, however, no reason why anybody needs to pay more tax than they ow. They just have to check their tax code - something people should do whether they get savings interest or not - and if HMRC use the wrong numbers, tell them what the correct ones are.

andy_poulton said:

BONKERS I am in my late 70's and this was a nightmare to try and sort out. Dread to think then what my future holds. I envy 66% of the country then not doing this. I told them I am stopping send MY figures [THEY ASKED ME ORIGINALLY AND SENT THE FORMS !!]
They answer was okay fine. WOW.

If you don't provide your own figures for savings interest, HMRC will be using what banks and building societies tell them.

If you find it too difficult to manage your tax affairs now, or expect that you do in future, you should engage an accountant, or better still, arrange for a trustworthy person having Power Of Attorney so they can handle your finances.

andy_poulton

Thanks Colston. The figures were from a time just after the 1k allowance kicked in and I posted asking what to do as I had no idea and no one was telling HMRC how much interest we had earnt.
The  thread went on for quite a while and seemed to be a mix as I guessed above. Also friends and family are still in the don't know or don't care camp.
Thanks for the advice on how to manage my future affairs Just dome 4LPA's for us both. I just felt 3 hours today and 4 hours the other day writing to the HMRC was such an effort and waste of time.
By the way they did not believe my figures if the varied by only a few p [they were from the statements the banks/socs sent]
So they just added them in altogether. I have just left them with the last three years of not mine now as the believed the banks and Building socs and used them [just a couple of p difference]

andy_poulton

PS As mentioned my PTA and my wifes PTA are frozen as read only. I cannot add, alter, or submit, update anything I have asked and complained and told that is how yours is. Its BETA. You will have to write in. That does NOT get uploaded either. The only way I get a result is a bar graph across the top that states enquiries pending that gradually moves L to R.
I then ring them.

zagfles

colsten said:

HansOndabush said:

Why then do HMRC keep deducting 'untaxed interest' of a few hundred pounds from my wife's tax code notification meaning she doesn't get her full personal allowance even though she has never been anywhere near earning £1,000 of interest in any tax year? This seems to happen every tax year and takes a lot of faff to sort out.

Your wife, like all other UK income tax payers, can update her expected income online, in her Personal Tax Account. In my experience, updates get processed very quickly, and the tax code gets adjusted as necessary.

Not if they move you onto a non cumulative code because of the reduction in the tax code. I'm still stunned at the sheer stupidity of the system that causes so much unnecessary hassle by deducting untaxed interest from tax codes when tax is not and never would be due on that interest. Eg see https://forums.moneysavingexpert.com/discussion/6227843/big-overpayment-of-tax-caused-by-deducting-interest-from-tax-code

colsten

What's a non cumulative code?

Dazed_and_C0nfused

colsten said:

What's a non cumulative code?

It's where the employer/pension payer operates the code against an individual pay day without taking into account the income received in previous pay periods.

The emergency tax code is currently 1257L and that will be used on a non cumulative the first time a pension is paid or if someone starts a job part way through the year and chooses option B from the new starter declaration.