Hargreaves Lansdown Active Savings - Income Tax

Can anyone tell me the correct answer to the tax position with HLAS. I have been made aware that HL do not inform HMRC of the interest awarded to their savers. Instead they send an annual tax statement to the saver and it is up to them to inform HMRC. Although I appreciate that it is down to the individual to inform HMRC of any interest received, you can generally expect Banks & BS to have done that also.
I have also been told that the individual B & BS on your Active Savings may or may not also inform HMRC of interest awarded but HL don't know the exact answer as it the savers responsibility to deal with their own tax affairs.
Therefor if you contact HMRC to find out if any institutions have informed them of interest paid to a saver, you wouldn't be able to tally that with your Active Savings interest  statement because it doesn't itemise individually each institution, only a total.
Anyone had dealings with HMRC re. HLAS?
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  • coastline
    coastline Posts: 1,630
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    Log in to HL Active Savings and use the Transaction History tab ? It's possible to set the dates to a year or months. Interest payments should be highlighted from each bank or building society as they go into your account . Simply add them together and fill in your tax return.
  • caveman38
    caveman38 Posts: 1,289
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    coastline said:
    Log in to HL Active Savings and use the Transaction History tab ? It's possible to set the dates to a year or months. Interest payments should be highlighted from each bank or building society as they go into your account . Simply add them together and fill in your tax return.
    Do you know if HMRC were already aware of the interest you earned from any institution before you submitted your AS figure?
  • Are HL actually paying any interest on these accounts?
  • caveman38
    caveman38 Posts: 1,289
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    Are HL actually paying any interest on these accounts?
    They become the third party. You open an Active Saver account with them (along maybe with your SIPP) and you sometimes get better rates than those offered to the public. When interest is paid from the instution, it is paid into your AS hub the same as when a product matures. Annually you receive a statement informing you of your total interest, which you are supposed to submit to HMRC. HL unfortunately are not aware as to whether the institution may also have informed HMRC themselves. 
    Therefor as coastline suggested it may be good practice to keep an individual account of the interest on each account in case you pay HMRC twice.
    I don't know how I can find out the definitive answer as HL aren't interested in the tax side of things. 
  • coastline
    coastline Posts: 1,630
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    caveman38 said:
    coastline said:
    Log in to HL Active Savings and use the Transaction History tab ? It's possible to set the dates to a year or months. Interest payments should be highlighted from each bank or building society as they go into your account . Simply add them together and fill in your tax return.
    Do you know if HMRC were already aware of the interest you earned from any institution before you submitted your AS figure?
    Not sure but the figure you give them is used as a guide for next years return so a tax code is generated where needed. If its way out you can contact them with updated figures. 
  • You can ask HMRC for a list of what interest has been reported for a specific tax year and that would give you a good idea.

    But I don't know why the organisation paying the interest wouldn't be reporting it?
  • caveman38
    caveman38 Posts: 1,289
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    edited 11 October 2022 at 12:29PM
    coastline said:
    caveman38 said:
    coastline said:
    Log in to HL Active Savings and use the Transaction History tab ? It's possible to set the dates to a year or months. Interest payments should be highlighted from each bank or building society as they go into your account . Simply add them together and fill in your tax return.
    Do you know if HMRC were already aware of the interest you earned from any institution before you submitted your AS figure?
    Not sure but the figure you give them is used as a guide for next years return so a tax code is generated where needed. If its way out you can contact them with updated figures. 
    But it is required for tax purposes in the current year. Although the institutions may not inform HMRC till June say. If you inform them before that of an Active Savings total, then you may well pay twice until you contact them. Would it be advisable to delay contacting them until late in the following tax year?
  • coastline
    coastline Posts: 1,630
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    edited 11 October 2022 at 1:26PM
    caveman38 said:
    coastline said:
    caveman38 said:
    coastline said:
    Log in to HL Active Savings and use the Transaction History tab ? It's possible to set the dates to a year or months. Interest payments should be highlighted from each bank or building society as they go into your account . Simply add them together and fill in your tax return.
    Do you know if HMRC were already aware of the interest you earned from any institution before you submitted your AS figure?
    Not sure but the figure you give them is used as a guide for next years return so a tax code is generated where needed. If its way out you can contact them with updated figures. 
    But it is required for tax purposes in the current year. Although the institutions may not inform HMRC till June say. If you inform them before that of an Active Savings total, then you may well pay twice until you contact them. Would it be advisable to delay contacting them until late in the following tax year?
    All I can tell you is fill in your 2021-22 online HMRC account. Let's say your total HLAS is £3,000 for the year. If there's a need to pay tax you'll be asked how you want to pay. Your tax code will be adjusted if needed. This £3,000 figure will show in your HMRC account as a possibility for next year ? Sometimes it shows even more. If that's not going to be the case get in touch on the phone. There's been threads on here where posters have had problems with multiple accounts that have matured but still have been used as a guide to next years return. I've never had to do this as it's always gone smoothly. Get's back to what I said earlier keep those details as they come through in the HL transactions. In some cases you can obtain annual interest statements by post for each account but it doesn't appear possible with HL . Maybe print off those transactions in HLAS ?
  • caveman38
    caveman38 Posts: 1,289
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    Thanks for the advice coastline. I've dealt with HMRC many times and had disputes with my PTA, which are always resolved. But if there's a chance that you can be assessed twice for the same amounts then it is best to avoid it (if you can) in the first place. I can't believe that there is not an answer from someone who's had an AS account, is a tax payer and isn't aware of whether the institutions inform HMRC of the interest BEFORE you submit maybe a duplicate amount in your AS certificate. 
    I thought having an AS account would make life easy, but I'm beginning to doubt it.

  • I am interested in the above thread. All the HMRC information re interest income implies HMRC will gather this information from the interest payers thus avoiding the need for the majority of taxpayers to file under self-assessment. This is particularly pertinent given that interest rates in 22/23 were high enough to trigger significant interest even on modest savings. I am dealing with a friend's situation for 22/23 whereby she has informed HMRC of interest income in the tax year as it exceeds £1,000 and HMRC have responded that none of the HL Active Savings Interest is on their system. HMRC need institution name, sort code and account number before they will tax the interest (they have in effect told my friend that she must be wrong) It appears that neither Hargreaves Lansdown nor the underlying institutions provide any information to HMRC. I did speak to HL about this a few months ago and they explained that Active Savings works in two ways 1) your money is held separately by the underlying institution in which case there may be a number, sort code etc 2) your money is pooled with other depositors in which case there is no further detail. It would seem that the only way round this is to register for self-assessment otherwise it seems impossible to report the income. i might suggest that HL should be giving this some thought as their clients are going to be impacted.  

    i like the Active Savings model but this will become an issue if tax is unreported. 
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