HMRC adjusting code based on wrong interest amount

Flugelhorn

DH gets NHS pension and interest from our savings account - the interest was higher a few years back before they reduced the rates (and we spent some money) - now they keep sending a code as though he is still getting the same interest each year.

He completes a self-assessment (on paper) - they adjust the code to allow for a refund, send a letter basically saying "stop sending self assessments" and promptly get the amount of interest wrong again the next year - how are you supposed to claim it back? is there some form ?

molerat

Does the interest received mean that any tax is due or does it fall within the 0% band ?

They did it to me one year - using old closed one year accounts - which meant I would have paid undue tax but a phone call sorted it and it has never happened since.

https://www.gov.uk/claim-tax-refund

Thrugelmir

You can advise the HMRC online of your expected income by accessing your personal tax account. 

Dazed_and_C0nfused

Flugelhorn said:

DH gets NHS pension and interest from our savings account - the interest was higher a few years back before they reduced the rates (and we spent some money) - now they keep sending a code as though he is still getting the same interest each year.

He completes a self-assessment (on paper) - they adjust the code to allow for a refund, send a letter basically saying "stop sending self assessments" and promptly get the amount of interest wrong again the next year - how are you supposed to claim it back? is there some form ?

Any refund due would be made via his Self Assessment calculation, not a tax code adjustment.

Any tax code adjustment would just be provisional and is usually based on the latest information available i.e. it will be actual information from a previous tax year, whether that be from a Self Assessment return or the information banks have provided.

Flugelhorn

so if they keep saying "don't send us self assessment forms" - does that mean they will get the information from the banks instead? 

Dazed_and_C0nfused

Flugelhorn said:

so if they keep saying "don't send us self assessment forms" - does that mean they will get the information from the banks instead? 

Yes.

Banks are required to report the details and HMRC then use the information to make sure the correct tax is paid.

https://www.gov.uk/guidance/bank-and-building-society-interest-returns

https://www.gov.uk/tax-overpayments-and-underpayments

RG2015

Thrugelmir said:

You can advise the HMRC online of your expected income by accessing your personal tax account. 

There is currently no way of advising HMRC of my interest received via my personal tax account online.

RG2015

HMRC have overestimated my untaxed interest for the last three years and following years and issued me with an incorrect tax code.

On each occasion I have phoned them and corrected the individual figures they have been using. They are quite happy to do this but each year they add in figures for closed accounts from previous years (and also for previous years' figures where the interest is now significantly lower). 

Thrugelmir

RG2015 said:

Thrugelmir said:

You can advise the HMRC online of your expected income by accessing your personal tax account. 

There is currently no way of advising HMRC of my interest received via my personal tax account online.

I adjust and update mine through the investment income option. 

RG2015

Thrugelmir said:

RG2015 said:

Thrugelmir said:

You can advise the HMRC online of your expected income by accessing your personal tax account. 

There is currently no way of advising HMRC of my interest received via my personal tax account online.

I adjust and update mine through the investment income option. 

Thanks, this is good to know.

However, I would not be comfortable submitting interest received in a section headed investment income.

Nevertheless I will keep this in mind if my current telephone method is not successful.

Edit: I have delved a bit further and can see that one of the categories is untaxed interest. I do not regard this as investment income, but clearly the HMRC webpage designers do. 

Thrugelmir

Gross interest is a form of investment income. There's many forms of same not just from savings accounts.