Tax on savings question.

Rusty190

Due to a change in personal circumstances and the rising interest rates, I am in the position whereby I will earn over £1,000 interest on various savings this year.
I appreciate that the surplus will be taxed - I am a basic rate tax payer.
I am retired.
I know the usual method of recouping this would be through a change in tax code by HMRC but, for reasons I won't bore you with, I would prefer that my tax code is left untouched and I would prefer to pay the tax bill as a lump sum.

Can this be done and if so, how would I facilitate this?

PS. I know nothing about tax/money stuff so would appreciate simple language and as few acronyms as possible please!  Many thanks.

ColdIron

If you have no earned income and pension income of less than £17,570 you may have more than the £1,000 Personal Savings Allowance available to you

https://www.moneysavingexpert.com/savings/tax-free-savings/

RG2015

Rusty190 said:

Due to a change in personal circumstances and the rising interest rates, I am in the position whereby I will earn over £1,000 interest on various savings this year.
I appreciate that the surplus will be taxed - I am a basic rate tax payer.
I am retired.
I know the usual method of recouping this would be through a change in tax code by HMRC but, for reasons I won't bore you with, I would prefer that my tax code is left untouched and I would prefer to pay the tax bill as a lump sum.

Can this be done and if so, how would I facilitate this?

PS. I know nothing about tax/money stuff so would appreciate simple language and as few acronyms as possible please!  Many thanks.

I believe the best way is to phone HMRC and ask them.

Their lines are often very busy but if you phone at 8:00 am Tuesday to Thursday you should get through within a few minutes.

I usually phone at 7:55 to allow time to get through the automated questions as the manned lines open at 8:00 am.

eskbanker

Rusty190 said:

I know the usual method of recouping this would be through a change in tax code by HMRC but, for reasons I won't bore you with, I would prefer that my tax code is left untouched and I would prefer to pay the tax bill as a lump sum.

[...]

PS. I know nothing about tax/money stuff...

Since it seems at least possible that your reasons for not wanting your tax code changed may be due to some sort of misunderstanding, why not share them?  Having the money in your pocket for longer is a fairly standard MSE approach....

Rusty190

Thank you all.
My personal allowance is £1,000 as I'm a basic rate tax payer and I have an occupational pension plus a state pension.
I would prefer to pay it off @eskbanker as it's then done with and I can forget about it and sleep at night!
I don't want to be in the position of having  to claim things back, fill forms in trying to get the tax code changed back  etc etc.
I also don't like the thought of owing money to anyone.
I appreciate this wouldn't necessarily be everyone's approach but, for me, peace of mind is priceless.

Dazed_and_C0nfused

Rusty190 said:

Thank you all.
My personal allowance is £1,000 as I'm a basic rate tax payer and I have an occupational pension plus a state pension.
I would prefer to pay it off @eskbanker as it's then done with and I can forget about it and sleep at night!
I don't want to be in the position of having  to claim things back, fill forms in trying to get the tax code changed back  etc etc.
I also don't like the thought of owing money to anyone.
I appreciate this wouldn't necessarily be everyone's approach but, for me, peace of mind is priceless.

As your pension income must be at least £16,310, probably £17,570, then chances are HMRC will opt to collect the tax via a future tax code.

But once you have received their calculation there is nothing to stop you making a voluntary payment to clear the amount owed and then no tax code adjustment to collect the tax owed would be necessary.

You are normally notified several months in advance, say by Autumn 2023 for tax owed for 2022-23, and the tax code change wouldn't come into effect until 6 April 2024 so plenty of time to make payment.

However this only applies to tax owed in previous years.  HMRC will start trying to collect the correct amount of tax for the current tax year at the same time i.e. Autumn 2023.  There isn't much you can do abou this unless your interest is expected to reduce.

Doctor_Who

Rusty190 said:

Thank you all.
My personal allowance is £1,000 as I'm a basic rate tax payer and I have an occupational pension plus a state pension.
I would prefer to pay it off @eskbanker as it's then done with and I can forget about it and sleep at night!
I don't want to be in the position of having  to claim things back, fill forms in trying to get the tax code changed back  etc etc.
I also don't like the thought of owing money to anyone.
I appreciate this wouldn't necessarily be everyone's approach but, for me, peace of mind is priceless.

I think I've seen it mentioned in this forum that you can try to pay the tax owed through your personal tax account on the Gov.uk website, but I may have got that wrong. Dazed_and_C0nfused would know!

Edit: they beat me to it!

eskbanker

Rusty190 said:

I would prefer to pay it off @eskbanker as it's then done with and I can forget about it and sleep at night!
I don't want to be in the position of having  to claim things back, fill forms in trying to get the tax code changed back  etc etc.
I also don't like the thought of owing money to anyone.
I appreciate this wouldn't necessarily be everyone's approach but, for me, peace of mind is priceless.

Well it's not for me to try to persuade you otherwise, but I think you'll find that your preferred approach is actually more administratively onerous than letting HMRC simply deal with it in the standard way!

Rusty190

Thank you all.
I will no doubt be back - often!