Over PSA tax payment

Dazed_and_C0nfused

So other replies saying I would need to fill out a SA doesnt seem to make sense with this....

Where were you told that?

duckson

Dazed_and_C0nfused said:

So other replies saying I would need to fill out a SA doesnt seem to make sense with this....

Where were you told that?

Apologies, I've gone off at a tangent and replied on the wrong forum!! 

I raised the query on another forum and it was stated I needed to fill in a SA, hence me asking the experts on MSE.....thanks all and ignore my last post. 

Ocelot

Albermarle said:

VNX said:

Tax on savings interest is payable in the tax year you have access to the interest.

This is a debatable point ( as debated in many other threads) as some providers seem to furnish HMRC with annual interest data, with 2,3,5, 7 year fixed rate ,  even when the interest is not actually available. A grey area at best.

However this has no relevance to the OP, who only has a one year fixed rate,

Indeed. All my account providers report all my interest every year to HMRC, even though most of them are fixed rates, where the interest is not available until the end of the term. This has happened every year since 2016. I thus get taxed on interest I haven't yet received every year. 

Bigwheels1111

Ocelot said:

Albermarle said:

VNX said:

Tax on savings interest is payable in the tax year you have access to the interest.

This is a debatable point ( as debated in many other threads) as some providers seem to furnish HMRC with annual interest data, with 2,3,5, 7 year fixed rate ,  even when the interest is not actually available. A grey area at best.

However this has no relevance to the OP, who only has a one year fixed rate,

Indeed. All my account providers report all my interest every year to HMRC, even though most of them are fixed rates, where the interest is not available until the end of the term. This has happened every year since 2016. I thus get taxed on interest I haven't yet received every year. 

I made sure my fixed rates paid out annually and away.
One for an income and too for tax reasons.
So I did not get hit with a large bill.

duckson

Another one!

If you are over the PSA and HMRC need to change your tax code, how quickly is this implemented after the end of the tax year?

eskbanker

duckson said:

Another one!

If you are over the PSA and HMRC need to change your tax code, how quickly is this implemented after the end of the tax year?

A year, i.e. if you have a tax liability arising from, say, 2022-23, then it'll be the 2024-25 code that's changed to collect it.

isasmurf

OP, the process is this

After the end of the relevant tax year
6 April to 30 June - Banks and Building Societies send HMRC data on interest paid during the previous tax year

June to usually end of October - when all expected information is received HMRC collates all this information with your Paye data and reconciles the tax due with the tax paid. When this is done, if there is an underpayment or overpayment of tax  then you'll be sent shortly afterwards a P800 tax calculation showing their calculations. Most people receive this between September and November

January to March - if there is an underpayment to be collected by Paye, you'll receive a notification of a change in tax code for the start of the next tax year. 

duckson

Cheers, great info. 

It’s possible that my wife’s income may dip into the Savings Rate (sub £17570) as she has a SIPP as well as a workplace pension. Obviously the workplace pension is taken out of her pay packet but will HMRC also know/remove her SIPP contributions automatically from her income at the end of the tax year or will this need to be declared with SA?
Also I assume it’s the gross amount that would be taken off her earnings ie she pays in £120 to the SIPP so £150 with tax relief, which makes it £1800 (12x£150) for the year?

Dazed_and_C0nfused

duckson said:

Cheers, great info. 

It’s possible that my wife’s income may dip into the Savings Rate (sub £17570) as she has a SIPP as well as a workplace pension. Obviously the workplace pension is taken out of her pay packet but will HMRC also know/remove her SIPP contributions automatically from her income at the end of the tax year or will this need to be declared with SA?
Also I assume it’s the gross amount that would be taken off her earnings ie she pays in £120 to the SIPP so £150 with tax relief, which makes it £1800 (12x£150) for the year?

You have misunderstood something here as RAS contributions to a SIPP would never reduce your taxable income.

For most people the only tax benefit is the basic rate relief which is added by the pension company, the £30 on each payment in your example.

duckson

Ok so the £120 per month SIPP payment wouldn’t come off her yearly income total but her workplace pension would?