Taxation of interest

Albermarle

CaptainWales said:

Already maxed out my isa and don't want to leave in non interest paying account for any length of time

That would not be very sensible . 80% of something is better than 100% of nothing .

JannGrew

Hello! If you exceed your annual allowance, you may need to complete a self-assessment tax return and pay any tax due by January 31st following the end of the tax year. It's always best to check with HM Revenue and Customs to make sure you're meeting your tax obligations correctly.

eskbanker

JannGrew said:

Hello! If you exceed your annual allowance, you may need to complete a self-assessment tax return and pay any tax due by January 31st following the end of the tax year. It's always best to check with HM Revenue and Customs to make sure you're meeting your tax obligations correctly.

As pointed out several times on the first page of the thread, it's only necessary to self-assess if taxable interest exceeds £10K.

Ocelot

Be aware that the tax due is taken by reducing your tax free allowance, which makes the higher rate threshold lower for the individual and can push some into paying 40% tax on their savings, despite earning less than the normal higher rate threshold (with its concomitant £500 PSA).

Van_Girl

eskbanker said:

JannGrew said:

Hello! If you exceed your annual allowance, you may need to complete a self-assessment tax return and pay any tax due by January 31st following the end of the tax year. It's always best to check with HM Revenue and Customs to make sure you're meeting your tax obligations correctly.

As pointed out several times on the first page of the thread, it's only necessary to self-assess if taxable interest exceeds £10K.

From previous slightly weird posts, I'm thinking JannGrew is not legit/ a bot?

flaneurs_lobster

Van_Girl said:

eskbanker said:

JannGrew said:

Hello! If you exceed your annual allowance, you may need to complete a self-assessment tax return and pay any tax due by January 31st following the end of the tax year. It's always best to check with HM Revenue and Customs to make sure you're meeting your tax obligations correctly.

As pointed out several times on the first page of the thread, it's only necessary to self-assess if taxable interest exceeds £10K.

From previous slightly weird posts, I'm thinking JannGrew is not legit/ a bot?

Yes, almost human. Has someone let Chat GPT loose on the board? The posts are all very precisely worded yet offer very generic, general advice/comment. Odd.

Makes a change from full-on spambots.

eskbanker

Van_Girl said:

eskbanker said:

JannGrew said:

Hello! If you exceed your annual allowance, you may need to complete a self-assessment tax return and pay any tax due by January 31st following the end of the tax year. It's always best to check with HM Revenue and Customs to make sure you're meeting your tax obligations correctly.

As pointed out several times on the first page of the thread, it's only necessary to self-assess if taxable interest exceeds £10K.

From previous slightly weird posts, I'm thinking JannGrew is not legit/ a bot?

Yes, that struck me too, once I saw more of their posts:

https://forums.moneysavingexpert.com/discussion/comment/80024787/#Comment_80024787

Albermarle

eskbanker said:

Van_Girl said:

eskbanker said:

JannGrew said:

Hello! If you exceed your annual allowance, you may need to complete a self-assessment tax return and pay any tax due by January 31st following the end of the tax year. It's always best to check with HM Revenue and Customs to make sure you're meeting your tax obligations correctly.

As pointed out several times on the first page of the thread, it's only necessary to self-assess if taxable interest exceeds £10K.

From previous slightly weird posts, I'm thinking JannGrew is not legit/ a bot?

Yes, that struck me too, once I saw more of their posts:

https://forums.moneysavingexpert.com/discussion/comment/80024787/#Comment_80024787

Maybe AI will make us all redundant !

CaptainWales

Ocelot said:

Be aware that the tax due is taken by reducing your tax free allowance, which makes the higher rate threshold lower for the individual and can push some into paying 40% tax on their savings, despite earning less than the normal higher rate threshold (with its concomitant £500 PSA).

I wasn't aware of this - are you able to give an example of how this would work as I am near to becoming a higher rate threshold? 

Dazed_and_C0nfused

CaptainWales said:

Ocelot said:

Be aware that the tax due is taken by reducing your tax free allowance, which makes the higher rate threshold lower for the individual and can push some into paying 40% tax on their savings, despite earning less than the normal higher rate threshold (with its concomitant £500 PSA).

I wasn't aware of this - are you able to give an example of how this would work as I am near to becoming a higher rate threshold? 

Ignore it it's wrong.

After allocating the Personal Allowance income is taxed in a specific order which cannot be changed.

Earnings/pension/rents/business profits first

Then savings interest

And then dividends.

I suspect the reference is to how tax codes are calculated however that is only ever a provisional attempt to collect the correct amount of tax.

When your actual tax liability is calculated there are only two things which would affect your Personal Allowance.  Applying for Marriage Allowance or having adjusted net income of £100,002 or more.

To establish your savings nil rate band you look at your tax liability ignoring the savings nil rate band.  If you are a higher rate payer at that point you will only get a savings nil rate band of £500.