HMRC 'in-credit' interest rates are higher (at 1.25%) than my ISA (0.3%) - Can I use HMRC to invest

SimonHolland1

HMRC 'in-credit' interest rates are higher (at 1.25%) than my ISA (0.3%) - Can I use HMRC as a savings investment?  
Simon

eskbanker

It's a moot point, because you can earn substantially more interest than 1.25% from many other places, and 0.3% will have been losing you loads of money - if you were motivated to find better interest on that pot, why leave it at such a poor rate up to now?

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
https://www.moneysavingexpert.com/savings/best-cash-isa/

mooneysaver

eskbanker said:

It's a moot point, because you can earn substantially more interest than 1.25% from many other places, and 0.3% will have been losing you loads of money - if you were motivated to find better interest on that pot, why leave it at such a poor rate up to now?

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
https://www.moneysavingexpert.com/savings/best-cash-isa/

Not really helpful or relevant: OP is asking about saving with HMRC. The accounts on the lists you've linked to are all with private banks.

eskbanker

mooneysaver said:

eskbanker said:

It's a moot point, because you can earn substantially more interest than 1.25% from many other places, and 0.3% will have been losing you loads of money - if you were motivated to find better interest on that pot, why leave it at such a poor rate up to now?

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
https://www.moneysavingexpert.com/savings/best-cash-isa/

Not really helpful or relevant: OP is asking about saving with HMRC. The accounts on the lists you've linked to are all with private banks.

As far as I'm concerned the post was helpful and relevant, in terms of pointing OP towards how to improve interest return on his money (obviously already with a 'private' financial institution), which was the subtext behind the stated question - are you seriously suggesting that simply answering 'yes' would have been more helpful in that context?

pat1976

Possibly, but I'd be concerned about security. I believe repayment fraud is rife. 

Dazed_and_C0nfused

I thought HMRC only paid interest on overpaid amounts.

You can't just pay an unnecessary amount and expect to get interest added to it when it's eventually refunded to you.

Albermarle

pat1976 said:

Possibly, but I'd be concerned about security. I believe repayment fraud is rife. 

Can you give some examples, or maybe clarify what you mean by repayment fraud ? 

Dazed_and_C0nfused

Albermarle said:

pat1976 said:

Possibly, but I'd be concerned about security. I believe repayment fraud is rife. 

Can you give some examples, or maybe clarify what you mean by repayment fraud ? 

Something like this I guess.

https://www.gov.uk/government/news/hmrc-urges-caution-as-fraudsters-seek-to-hijack-personal-tax-accounts

Malthusian

Dazed_and_C0nfused said:

You can't just pay an unnecessary amount and expect to get interest added to it when it's eventually refunded to you.

Isn't that exactly what an overpaid amount is?
Notwithstanding a) that anyone willing to go to the effort of sending money to HMRC so they could return it on some random date with 1.25% interest would just open savings accounts b) if you sent HMRC £1 million in respect of a £100 tax bill, they'd probably just send you back £1 million for taking the p.

Dazed_and_C0nfused

Malthusian said:

Dazed_and_C0nfused said:

You can't just pay an unnecessary amount and expect to get interest added to it when it's eventually refunded to you.

Isn't that exactly what an overpaid amount is?
Notwithstanding a) that anyone willing to go to the effort of sending money to HMRC so they could return it on some random date with 1.25% interest would just open savings accounts b) if you sent HMRC £1 million in respect of a £100 tax bill, they'd probably just send you back £1 million for taking the p.

It has to been paid against a charge to attract interest.

If you owe £100 and pay £1,000,000 then ask for £999,900 back you wouldn't receive any interest.

If the £100 was subsequently reduced to say £50 you would get interest on the £50 you had overpaid.

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam110260