Zopa Savings - Do I have to manually declare tax?

necronom

I used to have a Zopa P2P and ISA until it closed down, now they are a bank so I was going to open an account.
The problem is that with the P2P account I had to download a form, then write a letter and send that and the form to the government each year.  This account says the same if you go looking, though I'm sure most people wouldn't realise it.
I've never had to do this with any other bank account, as I get a letter saying my tax code has changed each year to make up the tax I owe.  I just asked Zopa if I did really need to manually send things to the tax office and they said yes.  I'm still not convinced, as I assume 99% of people would just open the account and not do that, as it's so bizarre.  I only saw it as I knew they did this with the P2P accounts.

Can anyone here clarify why they say I need to do this, but no-one else mentions it (including this site)?  I'm sure no-one else does that with other bank accounts.

It's a decent rate, as you can get about 2% (it had different levels of interest for giving notice on parts).

Daliah

Zopa, like other savings providers, will report the annual interest they pay you to the HMRC. HMRC might adjust your tax code or ask for a payment if you owe any tax. There are quite a few threads about tax on savings interest one this board, e.g. 

https://forums.moneysavingexpert.com/discussion/6382235/tax-on-savings
https://forums.moneysavingexpert.com/discussion/6372725/tax-on-savings
https://forums.moneysavingexpert.com/discussion/6367417/tax-on-interest

there are more....

eskbanker

Financial institutions are required to submit savings interest data directly to HMRC themselves, so there is no need for savers to do so, but anyone self-assessing anyway should include details there.

masonic

P2P was under a different regulatory regime. I've heard anecdotally that P2P interest was not being declared by the firms in the past. I don't know if that has changed. Zopa will be required to declare all interest paid within its savings accounts.

Remember that Zopa will declare interest on fixed term accounts as being received at maturity, despite showing it accumulate monthly.

necronom

Thanks for the replies.  I thought it would just be claimed through my tax code changing, and I've seen other threads about it, I was just confused about Zopa in particular saying very specifically that I would need to do it manually, unlike all my other bank accounts I've ever had.
I'll just ignore the bank and let the tax man sort it for me.  I hope I can re-join now without a load of hassle, as Zopa just closed my old accounts yesterday.

Grandad2b

AIUI you only have to declare interest received if you get more than £500 in any tax year (that's for higher rate tax payers - the threshold is £1000 if you're a basic rate tax payer). 
I wonder what the rule is if you don't pay any tax.

masonic

Grandad2b said:

AIUI you only have to declare interest received if you get more than £500 in any tax year (that's for higher rate tax payers - the threshold is £1000 if you're a basic rate tax payer). 
I wonder what the rule is if you don't pay any tax.

It's not necessary to declare untaxed interest unless it is >£10,000, at which point you would need to register for self-assessment. Anyone filing a tax return must include details of interest, even if below £500. The majority of people who have taxable interest don't declare it and HMRC collects the tax via PAYE after receiving details from savings institutions.