Self Assessment for over £10,000 interest. Before or after tax?

Dazed_and_C0nfused

necronom said:

Thanks everyone.
I'm REALLY hoping the Personal Savings Allowance goes up, as £1000 interest is something you can hit with about £16000 in savings now.

It has remained the same since it was introduced 7 years ago I think that's unlikely 😢

Bigwheels1111

I’m sure I read somewhere that it’s not changing for the next 3 years minimum.

contrarywise

HMRC rules on self assessment for interest and dividends. 

The confusion here is the disctintion between disclosure and liability/

HMRC rules state that over £10,000 pa all income from interest and dividends requires a self assessment return. [disclosure]

Even if the tax liability on this income of £10,000 pa is zero [liability]

So, in an extreme case, if all the £10,000 pa income from interest came from tax free ISAs, that would require disclosure, even though the tax liability on that income would be zero.

For the record, any income from interest from banks and building societies under  £10,000 pa would be covered by BBSI rules on disclusure and any tax liablity on this income would be determined by HMRC.

so sleep easy

contrarywise

and so would not require a self assessment return as this would be covered by the BBSI and HMRC.

Londonlisa12

So your saying if you get £ 9000 in non Isa interest and £1500 from Isa interest and this was your sole income you would need to fill an assessment form?
.

contrarywise

Lisa - that seems to be the rule - you could check with HMRC but I could not find a way online with every way I could enter the system with no income except for the in excess of £10,000 - every way HMRC system said I needed to fill in an assesment form. I tried the other approach too by giving a really high other income same result. I am not saying its right but that seems to be the way it is. You can contact HMRC but my response from the online system was no matter what your income even if you had not other income if you exceeded the £10,000 in interest or dividends is it required a self assessment. David

contrarywise

by the excess of £10,000 I meant in excess from interest and savings and I tried other income earnings from 0 to £100.000 and it did not change the result - HMRC were still wanting a self assessment form.

Olinda99

HMRC website say if you receive 'interest' over £10k you need to fill in a self assessment. Note that the website is quite clear in that it does not distinguish between ISA interest and any other kind of interest....


Check if you need to send a Self Assessment tax return

6. Did you get more than £10,000 from dividends or savings and investments?

Income from savings and investments includes:

• savings interest
• money from bare trusts
• interest in possession trusts

However, HMRC forum answer says ISA interest is not counted but this is only from a member

https://community.hmrc.gov.uk/customerforums/sa/5c7255ad-fc9d-ed11-9ac4-00155d975688

Dazed_and_C0nfused

Interest from an ISA is not taxable income and wouldn't need to be included on a tax return.

If you have taxable interest of £9,000 from banks and building societies and interest from a cash ISA of £1,500 then that isn't a reason to file a tax return.

Londonlisa12

I think we may have another “ which year to declare interest from multi year fixed rate accounts “ here😂