Exceeding the Personal Savings Allowance

RG2015

melbury said:

Just wondered about this, I have checked and went over the £1,000 allowance by circa £400 in the last tax year.  Do I have to notify HMRC or do the banks/building societies automatically inform them about savings interest?

With interest rates on the rise think I will have to start putting money into a cash ISA again.

Sometimes it may give a better yield saving in a non-cash ISA even after paying 20% tax.

Best easy access, Virgin Money 1.55% less 20% tax = 1.24% net
Best easy access cash ISA, Tesco Bank 1.32%

Best 1 year fixed rate, Raisin (National Bank of Egypt) 2.70% less 20% tax = 2.16% net
Best 1 year fixed rate cash ISA, Virgin Money 2.06%


I am in a similar position to you, but I will give my excess savings to my non-taxpaying better half in 2023/2024

huw01

This is an interesting thread that has explained a lot of unanswered questions I had, thanks to all.

The other option you may have is moving up to 50k into premium bonds. Any winnings from those are tax exempt arent they ?

Dazed_and_C0nfused

huw01 said:

This is an interesting thread that has explained a lot of unanswered questions I had, thanks to all.

The other option you may have is moving up to 50k into premium bonds. Any winnings from those are tax exempt arent they ?

Correct 🙂

RG2015

huw01 said:

This is an interesting thread that has explained a lot of unanswered questions I had, thanks to all.

The other option you may have is moving up to 50k into premium bonds. Any winnings from those are tax exempt arent they ?

Yes, all winnings are tax free.

https://www.nsandi.com/tax-free-saving

Bigwheels1111

I spoke to them about interest, I only need to repot and fill out a return if interest is more than 10k.

Chloe_G

So, if you normally exceed the PSA and they adjust your tax codes, but owing to interest rate rises, you will now earn more than 10k in interest, do you have to report it?  Or will they work it out themselves?

RG2015

Chloe_G said:

So, if you normally exceed the PSA and they adjust your tax codes, but owing to interest rate rises, you will now earn more than 10k in interest, do you have to report it?  Or will they work it out themselves?

They actually say that you need to register for self assessment if your interest income exceeds £10k, which is a different requirement to simply informing them about your interest. 

The details are towards the foot of the page on the link below.

https://www.gov.uk/apply-tax-free-interest-on-savings

wiseonesomeofthetime

I just wish they would say, "You owe x amount of tax on your interest earned in y tax year?" and allow me to pay that off direct, thus not messing around with my tax code each year.

Does not seem to be an option AFAIK.

Unless anyone has a different experience.

ColdIron

It is an option, do a Self Assessment. At the end the calculation tells you how much you owe and you can pay it straight away or wait until 31st Jan, up to you

If all you have is interest or dividends SA is a doddle and can be done (once registered) in 10 or 15 minutes

You can even do 'What Ifs'. Mess about with you interest, dividends, pension contributions etc and recalculate to see what effect it has. It shows how the tax is calculated and how the various allowances are applied

dales1

... and in your Self Assessment, you can check the boxes on page TR6 to say that you do not want your tax code to be adjusted.