I've been wondering this. For the first time I might hit the £1000 interest limit this year, so I was hoping to find a running total on Gov Gateway. I'm PAYE and have never done a tax return. I don't know how to work out all the interest myself as I have quite a lot of accounts (mostly containing £1 as I move the money to try to get the best rate) and some have annual interest, so my total interest earned at any given point is a bit of a mystery to me. Do I just have to wait until my tax code potentially changes?
I've been wondering this. For the first time I might hit the £1000 interest limit this year, so I was hoping to find a running total on Gov Gateway. I'm PAYE and have never done a tax return. I don't know how to work out all the interest myself as I have quite a lot of accounts (mostly containing £1 as I move the money to try to get the best rate) and some have annual interest, so my total interest earned at any given point is a bit of a mystery to me. Do I just have to wait until my tax code potentially changes?
You don't "work it out". The banks do that, you just need to keep a record of what you've been paid.
The easiest way without waiting to see a change in your Tax Code is to keep a simple spreadsheet of your interest. Online access to your accounts will show how much interest you were paid & when.
Keep a record of when interest was credited to your account between 6th April 2022 & 5th April 2023. You don’t have to try to calculate interest yourself, because although your savings are accruing interest the whole time, if the institution you’re saving with doesn’t report the interest having been paid within the Tax Year it won’t be taken into account by HMRC.
I don't know how to work out all the interest myself
You don’t need to work out all the interest yourself - you just go through all your accounts sometime after April 5 and write down all the interest credits you got since the last April 6. Tot it all up and you know exactly how much you received in interest.
In theory, this should match exactly what the providers report to HMRC. In practice, there can be discrepancies. The added difficulty is that you will have to ask HMRC for the numbers they are working with as they are not making them available to you automatically.
Sorry, I worded it badly. When I said I don't know how to work out all the interest myself, I meant that I don't know how to get an accurate running total during the tax year. I want to get ahead of the game as it were, and see if I'm on course to exceed the threshold. I can count up my interest payments if they're monthly, but many are annual so there are a lot of unknown amounts. From what everyone is saying though, HMRC won't know this figure either since the institution hasn't paid or reported it yet.
By the way the reason I want a running total, not one after April, is so that I can make decisions like fill up my cash ISA instead, or maybe increase my pension AVCs. Or just leave it and pay the tax of course 🙂
As I said you only need to focus on accounts where the interest is paid/credited to your account during the tax year, so for accounts that pay interest annually look at the date the interest is paid. For this tax year you can ignore any where the interest won’t be paid before 5th April.
For those where the interest will be paid in the next couple of months you should be able to use your spreadsheet to roughly calculate the interest paid. Focus on the accounts with larger balances, as the interest earned on an old account with £1 in it isn’t going to generate enough interest to affect your decision.
There’s a bit of work to initially set up your spreadsheet but once you have it, updating is quick & easy
As I said you only need to focus on accounts where the interest is paid/credited to your account during the tax year, so for accounts that pay interest annually look at the date the interest is paid. For this tax year you can ignore any where the interest won’t be paid before 5th April.
For those where the interest will be paid in the next couple of months you should be able to use your spreadsheet to roughly calculate the interest paid. Focus on the accounts with larger balances, as the interest earned on an old account with £1 in it isn’t going to generate enough interest to affect your decision.
There’s a bit of work to initially set up your spreadsheet but once you have it, updating is quick & easy
Could someone show me some sort of sample of a spreadsheet for tracking interest as I would love to set one up but very new to spreadsheets.
I choose the rooms that I live in with care, The windows are small and the walls almost bare, There's only one bed and there's only one prayer; I listen all night for your step on the stair.
As I said you only need to focus on accounts where the interest is paid/credited to your account during the tax year, so for accounts that pay interest annually look at the date the interest is paid. For this tax year you can ignore any where the interest won’t be paid before 5th April.
For those where the interest will be paid in the next couple of months you should be able to use your spreadsheet to roughly calculate the interest paid. Focus on the accounts with larger balances, as the interest earned on an old account with £1 in it isn’t going to generate enough interest to affect your decision.
There’s a bit of work to initially set up your spreadsheet but once you have it, updating is quick & easy
Could someone show me some sort of sample of a spreadsheet for tracking interest as I would love to set one up but very new to spreadsheets.
Mine is very simple, I just have four columns headed date, account type, provider and amount.
The total then feeds into a much more complex tab which adds on my forecast interest for the rest of the year, and estimates my full year income for pension and SA purposes.
I work on the basis of “periods”. A period starts when something happens: the tax year begins, the rate changes, I make a deposit or withdrawal, or the interest is capitalised. A period ends the day before the next period starts. For each completed period, I calculate the interest earned: the balance, multiplied by the rate, multiplied by the number of days between the period start and end dates (there’s a function for this) divided by 365. I define the rate as number type as ‘percentage’ to avoid having to divide by 100. For this you need five columns: start date, end date, balance, rate, interest earned in period. Then I have another column that keeps a running total of interest earned since the start of the tax year, which I zeroise when it is capitalised and added to the balance. To forecast interest, I “pretend” to close off the current period by putting in an end date. Hope this helps. Play about with some simple numbers until it works out right.
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I don't know how to work out all the interest myself as I have quite a lot of accounts (mostly containing £1 as I move the money to try to get the best rate) and some have annual interest, so my total interest earned at any given point is a bit of a mystery to me.
Do I just have to wait until my tax code potentially changes?
In theory, this should match exactly what the providers report to HMRC. In practice, there can be discrepancies. The added difficulty is that you will have to ask HMRC for the numbers they are working with as they are not making them available to you automatically.
From what everyone is saying though, HMRC won't know this figure either since the institution hasn't paid or reported it yet.
By the way the reason I want a running total, not one after April, is so that I can make decisions like fill up my cash ISA instead, or maybe increase my pension AVCs. Or just leave it and pay the tax of course 🙂
For those where the interest will be paid in the next couple of months you should be able to use your spreadsheet to roughly calculate the interest paid. Focus on the accounts with larger balances, as the interest earned on an old account with £1 in it isn’t going to generate enough interest to affect your decision.
There’s a bit of work to initially set up your spreadsheet but once you have it, updating is quick & easy
The windows are small and the walls almost bare,
There's only one bed and there's only one prayer;
I listen all night for your step on the stair.
The total then feeds into a much more complex tab which adds on my forecast interest for the rest of the year, and estimates my full year income for pension and SA purposes.
Hope this helps.
Play about with some simple numbers until it works out right.