£1000 interest limit before tax

kitkat68

I’m confused about paying tax on interest?!

I do self assess as I have a rental property - this year my circumstances have changed as I’ve given up work but I have had a sizable redundancy payment so will still be 40% tax payer this financial year. 

I have most of my savings in iSA’s so not applicable for tax on their interest but I now have over 100k in non ISA accounts…

Some of these pay interest monthly so will factor into my 23/24 return. I’m not planning on looking for work this tax year and some of the fixes mature in the 24/25 tax year so if I don’t work I guess I’ll benefit from the £18k income limit I’ve read about?

Gurberly99

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?

I used to faithfully record and advise HMRC of interest received (I don't do a self assessment).

UK institutions you invest with will/should advise HMRC of interest paid to you.

I gave up sending the info, as HMRC would happily send me a new tax coding, however despite my requests, they would not supply a breakdown as to their calculation and what institutions had advised them of what interest had been paid to me so I could never properly reconcile it to my own records.
A sad state of affairs, but in the end I decided it was't too far out, and it wasn't worth my time and pain trying to challenging it.

RG2015

Gurberly99 said:

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?

I used to faithfully record and advise HMRC of interest received (I don't do a self assessment).

UK institutions you invest with will/should advise HMRC of interest paid to you.

I gave up sending the info, as HMRC would happily send me a new tax coding, however despite my requests, they would not supply a breakdown as to their calculation and what institutions had advised them of what interest had been paid to me so I could never properly reconcile it to my own records.
A sad state of affairs, but in the end I decided it was't too far out, and it wasn't worth my time and pain trying to challenging it.

I once received a list but on two subsequent occasions they said they would send me a new list and never did.

badger09

I would advise anyone who might have to pay tax on their interest to keep detailed records of that interest. 

HMRC has been known to make mistakes😉 and having your own record makes it easier to challenge them.