HMRC Records of savings interest and self-assessment

masonic

Thanks, but sounds painful.

Dazed_and_C0nfused

RG2015 said:

masonic said:

RG2015 said:

masonic said:

RG2015 said:

masonic said:

dosh37 said:

masonic said:

dosh37 said:

wmb194 said:

Zuzi said:

This may be a dumb question, but how do you know how much interest you earned, especially with multiple providers and moving savings around during the year?

Easy, you look at your statement and make a note of it. I use MS Money to keep track and produce reports for me.

I disagree! Many online savings providers prevent you from logging in after closing an account. Unless you save the tax information beforehand then the data is no longer available. All savings providers should send a closing tax statement THROUGH THE POST on account closure.

The money has to end up somewhere, so you should be able to account for it among your remaining bank accounts. Providers will issue an interest summary on request, but few send these out automatically because most people aren't on self-assessment. Those who are do have a responsibility to keep their own records as it is the taxpayer's responsibility to ensure the details they provide are accurate.

"it is the taxpayer's responsibility to ensure the details they provide are accurate."

This makes no sense when HMRC already know how much interest the tax payer has received and hence how much he/she owes. If HMRC cant't figure this out then they deserve to get screwed if people give incorrect information because savings organisations fail to supply the necessary information.

HMRC doesn't know how much interest the tax payer has received. They obtain data from banks, but this isn't complete, and there are various classes of interest that aren't reported, including interest from gilts, corporate bonds, offshore funds, property interest distributions, P2P investing and even HL Active Savings. It is always the taxpayers responsibility to know and declare their position, and should someone give incorrect information to HMRC, then they will be liable for any tax and penalties they incur, as well as risking prosecution should they try to defraud HMRC.

I am not questioning that this is the taxpayer’s responsibility. If HMRC make a mistake then I would be the one to suffer.

However, excluding the exceptions, most people’s interest received should be reported to HMRC. The problem is their flawed system that makes ridiculous estimates for the current tax year which is not corrected for at least a year thereafter.

HMRC should be held to a higher standard. We, on this site, mock their ineptitude but have to constantly monitor their actions.

If I started a business that constantly made mistakes but was able to blame the customer I would not last very long.

This is the reason why I'm staying on Self Assessment for as long as possible. The tax code shenanigans don't affect those on SA that pay the tax owed directly rather than have it collected via PAYE.

I was on SA from 1996 to 2004 when they took me off it. I can still see these years online plus y/e April 2022, although this is blank.

I could probably go back on but see no point. I know how their system works and remain in total control.

Unlike many others I have no problem with workarounds. This world is so full of rubbish systems and service that I just find a way to make it work for me.

It is not right so I will have the occasional moan but that is mostly gratuitous.

PS. I just noticed today that my PTA has been updated for y/e Apr 2022 as follows.

6 April 2021 to 5 April 2022

You paid the right amount of tax

There is nothing more to pay for this year.

I wonder if this augers well for their ongoing bank interest estimates for 22/23 and 23/24

Could you share the workarounds you mention that allow you to remain in total control? If there was a way I could ensure that I wasn't paying tax in advance that I did not owe, I would not have a problem with the current system. Can it be done through the PTA?

Going back on SA is not an option for most. You have to meet eligibility criteria. I haven't been eligible to self-assess for over 5 years, but HMRC haven't caught up with me yet as they did Albermarle.

I am not sure that my process is anything special but here goes.

My spreadsheet has the actual monthly interest for every bank and BS account I have. I have separate tabs for each tax year including the current year and following year.

When HMRC issue my tax code for the forthcoming year they include their estimate for interest received. This is my trigger to take action and advise them of my estimates.

I always phone them at 7:59 a.m. on Tuesday to Thursday and rarely have to wait for more than a couple of minutes.

I ask them to confirm their estimated total for the previous year, current year and upcoming year. I will also confirm if the previous year is based on actual figures from the banks. This means I know if there are any more changes to come.

If their total is way out I will then ask them for the actual figures they are using for each bank. They list this from the largest to the smallest so the first few will account for a high proportion of the total. Once I get down to figures less than £20 I tend to stop unless I am still above £1,000.

For each account amount they give me I will either confirm or correct their amounts and they will enter this onto their system. They use the same figures for the current year and forthcoming year so I only need to go through this process for one  year.

Once completed I can view the total figure for the current year on my PTA. I now know that this will not affect my tax code for the current year or following year.

We have now got to the time of year when HMRC will have received data from the banks so I am on the lookout for any changes. When I looked yesterday, my 2021/2022 year showed I had paid the correct amount of tax.

This suggests that HMRC are happy that my interest did not exceed £1,000. It also infers that there is no suggestion that any change will be made to the current year.

Therefore I can relax for the next 12 months. 

Personally I think your reading too much into that, or its correct for you but would mean something different for the masses where £1,000 is of no relevance i.e. spare Personal Allowance or savings starter rate is a factor.

Sensory

Dazed_and_C0nfused said:

Sensory said:

I actually didn't realise HMRC approached this with estimates. So for those of us ineligible for Self Assessment who manage our money down to the very last penny, we have to settle for never being up-to-date, always waiting for their systems to (hopefully) correctly calculate the tax owed on savings interests, having our tax codes constantly changed based on estimates that will inevitably lead to a never-ending cycle of late adjustments and corrections.

There is no perfect system and I think the majority of the gripes on this thread aren't about that part of the estimation system but are from people who have chosen to provide their own figures ahead of the banks reporting and they have subsequently been ignored for some reason.

I'd rather I simply pay everything I owe in the first week of the new tax year. That's it. Correct to the last penny.

Leave my tax code alone.

RG2015

masonic said:

Thanks, but sounds painful.

Ha!

I love figures and spreadsheets and when I talk to HMRC they appear to be happy to talk figures rather than listen to people moaning.

RG2015

Dazed_and_C0nfused said:

RG2015 said:

masonic said:

RG2015 said:

masonic said:

RG2015 said:

masonic said:

dosh37 said:

masonic said:

dosh37 said:

wmb194 said:

Zuzi said:

This may be a dumb question, but how do you know how much interest you earned, especially with multiple providers and moving savings around during the year?

Easy, you look at your statement and make a note of it. I use MS Money to keep track and produce reports for me.

I disagree! Many online savings providers prevent you from logging in after closing an account. Unless you save the tax information beforehand then the data is no longer available. All savings providers should send a closing tax statement THROUGH THE POST on account closure.

The money has to end up somewhere, so you should be able to account for it among your remaining bank accounts. Providers will issue an interest summary on request, but few send these out automatically because most people aren't on self-assessment. Those who are do have a responsibility to keep their own records as it is the taxpayer's responsibility to ensure the details they provide are accurate.

"it is the taxpayer's responsibility to ensure the details they provide are accurate."

This makes no sense when HMRC already know how much interest the tax payer has received and hence how much he/she owes. If HMRC cant't figure this out then they deserve to get screwed if people give incorrect information because savings organisations fail to supply the necessary information.

HMRC doesn't know how much interest the tax payer has received. They obtain data from banks, but this isn't complete, and there are various classes of interest that aren't reported, including interest from gilts, corporate bonds, offshore funds, property interest distributions, P2P investing and even HL Active Savings. It is always the taxpayers responsibility to know and declare their position, and should someone give incorrect information to HMRC, then they will be liable for any tax and penalties they incur, as well as risking prosecution should they try to defraud HMRC.

I am not questioning that this is the taxpayer’s responsibility. If HMRC make a mistake then I would be the one to suffer.

However, excluding the exceptions, most people’s interest received should be reported to HMRC. The problem is their flawed system that makes ridiculous estimates for the current tax year which is not corrected for at least a year thereafter.

HMRC should be held to a higher standard. We, on this site, mock their ineptitude but have to constantly monitor their actions.

If I started a business that constantly made mistakes but was able to blame the customer I would not last very long.

This is the reason why I'm staying on Self Assessment for as long as possible. The tax code shenanigans don't affect those on SA that pay the tax owed directly rather than have it collected via PAYE.

I was on SA from 1996 to 2004 when they took me off it. I can still see these years online plus y/e April 2022, although this is blank.

I could probably go back on but see no point. I know how their system works and remain in total control.

Unlike many others I have no problem with workarounds. This world is so full of rubbish systems and service that I just find a way to make it work for me.

It is not right so I will have the occasional moan but that is mostly gratuitous.

PS. I just noticed today that my PTA has been updated for y/e Apr 2022 as follows.

6 April 2021 to 5 April 2022

You paid the right amount of tax

There is nothing more to pay for this year.

I wonder if this augers well for their ongoing bank interest estimates for 22/23 and 23/24

Could you share the workarounds you mention that allow you to remain in total control? If there was a way I could ensure that I wasn't paying tax in advance that I did not owe, I would not have a problem with the current system. Can it be done through the PTA?

Going back on SA is not an option for most. You have to meet eligibility criteria. I haven't been eligible to self-assess for over 5 years, but HMRC haven't caught up with me yet as they did Albermarle.

I am not sure that my process is anything special but here goes.

My spreadsheet has the actual monthly interest for every bank and BS account I have. I have separate tabs for each tax year including the current year and following year.

When HMRC issue my tax code for the forthcoming year they include their estimate for interest received. This is my trigger to take action and advise them of my estimates.

I always phone them at 7:59 a.m. on Tuesday to Thursday and rarely have to wait for more than a couple of minutes.

I ask them to confirm their estimated total for the previous year, current year and upcoming year. I will also confirm if the previous year is based on actual figures from the banks. This means I know if there are any more changes to come.

If their total is way out I will then ask them for the actual figures they are using for each bank. They list this from the largest to the smallest so the first few will account for a high proportion of the total. Once I get down to figures less than £20 I tend to stop unless I am still above £1,000.

For each account amount they give me I will either confirm or correct their amounts and they will enter this onto their system. They use the same figures for the current year and forthcoming year so I only need to go through this process for one  year.

Once completed I can view the total figure for the current year on my PTA. I now know that this will not affect my tax code for the current year or following year.

We have now got to the time of year when HMRC will have received data from the banks so I am on the lookout for any changes. When I looked yesterday, my 2021/2022 year showed I had paid the correct amount of tax.

This suggests that HMRC are happy that my interest did not exceed £1,000. It also infers that there is no suggestion that any change will be made to the current year.

Therefore I can relax for the next 12 months. 

Personally I think your reading too much into that, or its correct for you but would mean something different for the masses where £1,000 is of no relevance i.e. spare Personal Allowance or savings starter rate is a factor.

From April 6th to the end of October my PTA said "Your tax for the year 2021/2022 has not yet been calculated". Then in November it changed to "You have paid the correct amount of tax for the year 2021/2022."

I cannot see how I am reading too much into this.

As regards it meaning something different for anyone else. I am talking about me not anyone else.

Quote "This suggests that HMRC are happy that my interest did not exceed £1,000"

Albermarle

masonic said:

RG2015 said:

masonic said:

RG2015 said:

masonic said:

dosh37 said:

masonic said:

dosh37 said:

wmb194 said:

Zuzi said:

This may be a dumb question, but how do you know how much interest you earned, especially with multiple providers and moving savings around during the year?

Easy, you look at your statement and make a note of it. I use MS Money to keep track and produce reports for me.

I disagree! Many online savings providers prevent you from logging in after closing an account. Unless you save the tax information beforehand then the data is no longer available. All savings providers should send a closing tax statement THROUGH THE POST on account closure.

The money has to end up somewhere, so you should be able to account for it among your remaining bank accounts. Providers will issue an interest summary on request, but few send these out automatically because most people aren't on self-assessment. Those who are do have a responsibility to keep their own records as it is the taxpayer's responsibility to ensure the details they provide are accurate.

"it is the taxpayer's responsibility to ensure the details they provide are accurate."

This makes no sense when HMRC already know how much interest the tax payer has received and hence how much he/she owes. If HMRC cant't figure this out then they deserve to get screwed if people give incorrect information because savings organisations fail to supply the necessary information.

HMRC doesn't know how much interest the tax payer has received. They obtain data from banks, but this isn't complete, and there are various classes of interest that aren't reported, including interest from gilts, corporate bonds, offshore funds, property interest distributions, P2P investing and even HL Active Savings. It is always the taxpayers responsibility to know and declare their position, and should someone give incorrect information to HMRC, then they will be liable for any tax and penalties they incur, as well as risking prosecution should they try to defraud HMRC.

I am not questioning that this is the taxpayer’s responsibility. If HMRC make a mistake then I would be the one to suffer.

However, excluding the exceptions, most people’s interest received should be reported to HMRC. The problem is their flawed system that makes ridiculous estimates for the current tax year which is not corrected for at least a year thereafter.

HMRC should be held to a higher standard. We, on this site, mock their ineptitude but have to constantly monitor their actions.

If I started a business that constantly made mistakes but was able to blame the customer I would not last very long.

This is the reason why I'm staying on Self Assessment for as long as possible. The tax code shenanigans don't affect those on SA that pay the tax owed directly rather than have it collected via PAYE.

I was on SA from 1996 to 2004 when they took me off it. I can still see these years online plus y/e April 2022, although this is blank.

I could probably go back on but see no point. I know how their system works and remain in total control.

Unlike many others I have no problem with workarounds. This world is so full of rubbish systems and service that I just find a way to make it work for me.

It is not right so I will have the occasional moan but that is mostly gratuitous.

PS. I just noticed today that my PTA has been updated for y/e Apr 2022 as follows.

6 April 2021 to 5 April 2022

You paid the right amount of tax

There is nothing more to pay for this year.

I wonder if this augers well for their ongoing bank interest estimates for 22/23 and 23/24

Could you share the workarounds you mention that allow you to remain in total control? If there was a way I could ensure that I wasn't paying tax in advance that I did not owe, I would not have a problem with the current system. Can it be done through the PTA?

Going back on SA is not an option for most. You have to meet eligibility criteria. I haven't been eligible to self-assess for over 5 years, but HMRC haven't caught up with me yet as they did Albermarle.

Yes I have tried to restart doing SA, but 'Computer says No' 

Chloe_G

I'm on the never ending cycle of them changing my PAYE code - at one point a couple of years ago they seemed to send me a different code every couple of weeks.  Also, I have some HL Active Savings for a couple of years - after reading this thread, am I right to believe that I have never paid tax on the interest I have earnt there??  Do I need to phone HMRC to correct this?

masonic

Chloe_G said:

I'm on the never ending cycle of them changing my PAYE code - at one point a couple of years ago they seemed to send me a different code every couple of weeks.  Also, I have some HL Active Savings for a couple of years - after reading this thread, am I right to believe that I have never paid tax on the interest I have earnt there??  Do I need to phone HMRC to correct this?

Yes, it may be the case that you've underpaid due to the interest received from HL Active Savings. Easiest first step would be to do your own calculation for a previous tax year to check what you actually paid vs should have paid.

ScarletBea

Yes, I agree with masonic: always try to do your calculations first.
I've got an excel template, not sure I can share files here (also I'm not near my private laptop for a week now).
To be honest, I'd worry about the last year's tax only and forget about older years... The impact won't be that big, rates used to be so low...

Sensory

Tax on savings interest was a lot simpler when it just defaulted to net, at least for basic rate. Being able to initiate corrective matters yourself with R40 and R85, to update records in a timely manner, without your tax code constantly changing to adjust for predictive forecasting.

I know for 2023/2024 I will have to pay tax on savings interest, and on 6th April 2024 I will know exactly how much, but there’s nothing I can do to pay that exact amount as soon as I can because I’m on PAYE.

This reminds me of an unsolicited call I received where I was offered ‘free’ assistance with reviewing my accounts to check whether I was eligible to make a PPI claim. I just immediately said no, I’m not eligible. This cold caller tried to bring up years’ worth of statements and transactions, to which I replied I certainly wasn’t going to divulge my entire transactional history to some avaricious opportunist when I already account for every penny that passes through my possession.

I just don’t like the idea of relinquishing control over basic cash finances to strangers who are just doing a job and don’t care one way or the other.