HMRC Records of savings interest and self-assessment

RG2015

Chloe_G said:

I'm going to need to fill one in now, next year.  Do you just register yourself or do they tell you to do it?  Also, do you then get the option of paying the tax in a lump sum rather than them changing my tax code and it being deducted from my salary?  Thanks.

Are you sure that you need to fill one in. Is it for interest received only? This is what HMRC say.

You need to register for Self Assessment if your income from savings and investments is over £10,000. Check if you need to send a tax return if you’re not sure.

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

Old_Slaphead

Chloe_G said:

I'm going to need to fill one in now, next year.  Do you just register yourself or do they tell you to do it?  Also, do you then get the option of paying the tax in a lump sum rather than them changing my tax code and it being deducted from my salary?  Thanks.

You can register yourself. Yes you get option to pay as lump sum.

subjecttocontract

HMRC will likely request to check the interest/ account details of a small number of people on an audit basis. My guess is they will also do this if there is a discrepancy between their records and what's been claimed. I have a business which was audited some years back. HMRC wrote me a letter that was quite a few pages long listing all of the information they required from me. Fortunately I kept detailed accounts and was able to produce a single spreadsheet which I  posted to them in the hope it would provide all the details they needed. It did indeed and they have never asked for details since.

The secret is to keep accurate, detailed records.

Zuzi

What would the best approach be then for someone who is a higher rate tax payer and will certainly be paid >500GBP in interest? So far, I was under the impression that it all works without manual intervention (only other income source in my case is salary) and HMRC will adjust the tax code and get all the needed tax that way sooner or later.

If I don't know how exactly they calculated my tax to pay (it doesn't sound like it is easy to find out), is it better to report the interest paid to them manually, to make sure they deduct no more than needed?

I only paid tax on my salary until this year, and I relied on them deducting the right amount via my payslips. Now I have seen conflicting information and even reports of too much tax being taken when it's tax from savings interest - should I get proactive? I'm not sure I would even notice if they take too much, I haven't been keeping records until now...

Thanks in advance for the advice. I am subscribed to many "tax on savings interest" threads on here but still unsure how best to handle this. 

isasmurf

Zuzi said:

What would the best approach be then for someone who is a higher rate tax payer and will certainly be paid >500GBP in interest? So far, I was under the impression that it all works without manual intervention (only other income source in my case is salary) and HMRC will adjust the tax code and get all the needed tax that way sooner or later.

If I don't know how exactly they calculated my tax to pay (it doesn't sound like it is easy to find out), is it better to report the interest paid to them manually, to make sure they deduct no more than needed?

I only paid tax on my salary until this year, and I relied on them deducting the right amount via my payslips. Now I have seen conflicting information and even reports of too much tax being taken when it's tax from savings interest - should I get proactive? I'm not sure I would even notice if they take too much, I haven't been keeping records until now...

Thanks in advance for the advice. I am subscribed to many "tax on savings interest" threads on here but still unsure how best to handle this. 

It is best to leave things alone and let the system do its job. When they identify you have untaxed interest you'll be sent a tax calculation and they'll be plenty of time before your tax code changes to challenge and correct their calculation if they have incorrect data. Unnecessarily interfering usually causes additional problems that you have to go back and correct.

HMRC are far from perfect but there is a vocal minority on here that make things sound worse than they are.

The only proactive thing you should be doing now is keeping a record of your interest to check against when the time comes and, if necessary, to report if a correction needs to be made.

Ocelot

You need a PhD in tax to understand the twice annual letters they send me constantly adjusting my tax code.

Band7

Zuzi said:

  
I only paid tax on my salary until this year, and I relied on them deducting the right amount via my payslips. Now I have seen conflicting information and even reports of too much tax being taken when it's tax from savings interest - should I get proactive? I'm not sure I would even notice if they take too much, I haven't been keeping records until now...

There is not much point in becoming proactive regarding past interest if you haven't kept any records. Going forward, however, you should keep records as this will enable you to verify / contest HMRC figures used in your tax code and/or self assessment.
.

Old_Slaphead

Band7 said

There is not much point in becoming proactive regarding past interest if you haven't kept any records. Going forward, however, you should keep records as this will enable you to verify / contest HMRC figures used in your tax code and/or self assessment.
.

Good advice.
Keep accurate records and send details to HMRC early in tax year. Any tax underpayment I pay direct rather than having it adjusted via coding that way it keeps things nice and easy. 

masonic

Old_Slaphead said:

Band7 said

There is not much point in becoming proactive regarding past interest if you haven't kept any records. Going forward, however, you should keep records as this will enable you to verify / contest HMRC figures used in your tax code and/or self assessment.
.

Good advice.
Keep accurate records and send details to HMRC early in tax year. Any tax underpayment I pay direct rather than having it adjusted via coding that way it keeps things nice and easy. 

I wasn't aware it was possible to make a direct payment once you know how much you owe when you are on PAYE. Does this also stop them from making assumptions about what you will receive in the following tax year and meddling with your future tax codes?

spider42

masonic said:

I wasn't aware it was possible to make a direct payment once you know how much you owe when you are on PAYE. Does this also stop them from making assumptions about what you will receive in the following tax year and meddling with your future tax codes?

You can ask them not to collect your liability via PAYE when you complete the tax return. You can also ask them not to attempt to use coding to collect tax on non-PAYE income for the following tax year. See boxes 2 and 3 on page TR6 of the SA100 tax return (there will be similar questions if you file using HMRC online).