£1000 interest limit before tax

haye
Forumite Posts: 8
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When you exceed the £1000 interest limit before being taxed, do you need to tell HMRC how much you've gone over by or do they figure it out themselves?
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haye said:When you exceed the £1000 interest limit before being taxed, do you need to tell HMRC how much you've gone over by or do they figure it out themselves?
Lots of people can't even use the £1,000 savings nil rate band (aka Personal Savings Allowance) and HMRC will factor in the Personal Allowance and any available savings starter rate band before the savings nil rate band is used.0 -
so how do they take the interest from you?0
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tiger135 said:so how do they take the interest from you?0
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Dazed_and_C0nfused said:tiger135 said:so how do they take the interest from you?
But then, I don't self-assess 🤷♂️0 -
haye said:When you exceed the £1000 interest limit before being taxed, do you need to tell HMRC how much you've gone over by or do they figure it out themselves?
This should be completed by September, so about 6 months after the end of the tax year (5 April).
If any of this is taxable, HMRC will usually adjust your tax code for the following year.
Hence tax due on interest paid in the year ended 5 April 2023 will likely be paid during the tax year commencing 6 April 2024.0 -
wiseonesomeofthetime said:Dazed_and_C0nfused said:tiger135 said:so how do they take the interest from you?
But then, I don't self-assess 🤷♂️
You would have the option to make a payment via your Personal Tax Account so if you paid £300 only the remaining £200 would be included in your code. Or pay all £500 and nothing would need to be included in your tax code as far as tax owed from 2022-23 is concerned.
The 31 January date normally applies to those who have been sent a Simple Assessment calculation. That's where HMRC wouldn't adjusted the tax code so it has to be paid direct.0 -
so once im over 1000 interest, effectively my interest rate drops 20%1
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tiger135 said:so once im over 1000 interest, effectively my interest rate drops 20%
Which is where a cash ISA that's more than 80% of the non ISA account rate is worth considering.0 -
Perhaps a relatively uncommon situation, but savings interest - even when taxed at 0% - increases your “Adjusted Net Income”. Which has implications for High Income Child Benefit Charge if earning between 50k and 60k. In my situation (3 kids), if I earn £100 in interest (even untaxed) I have to pay back £30 in child benefit.
I think it’s similar with people in the 100-125k bracket where personal allowance gets withdrawn.
Hence why I would only look at ISAs really.
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r6mile said:Perhaps a relatively uncommon situation, but savings interest - even when taxed at 0% - increases your “Adjusted Net Income”. Which has implications for High Income Child Benefit Charge if earning between 50k and 60k. In my situation (3 kids), if I earn £100 in interest (even untaxed) I have to pay back £30 in child benefit.
I think it’s similar with people in the 100-125k bracket where personal allowance gets withdrawn.
Hence why I would only look at ISAs really.1
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