Interest taxed at maturity unfair

masonic

badmemory said:

Is this why many fixed term accounts say access only by closure as that would presumably cover them to file annually.  I had my simple assessment (not that it is simple) through last week & my interest adds up to what they say apart from my NS&I interest.  That includes fixes of 2 yrs & over with access by closure.

I don't think many fixed term accounts permit early access by closure. If they did, then they would certainly fall outside of this discussion, as they'd not be fixed term in the traditional sense. These are usually referred to as limited access accounts.

Ocelot

Swipe said:

If the banks were made to report all interest to HMRC annually regardless of term, that would solve the problem. 

I thought they did. All my banks report yearly, even on 5 year fixed rates that I can't access.

Swipe

Ocelot said:

Swipe said:

If the banks were made to report all interest to HMRC annually regardless of term, that would solve the problem. 

I thought they did. All my banks report yearly, even on 5 year fixed rates that I can't access.

Ideally, they should only be reporting when it's a taxable event. That would resolve all the confusion.

metrobus

Ocelot said:

Swipe said:

If the banks were made to report all interest to HMRC annually regardless of term, that would solve the problem. 

I thought they did. All my banks report yearly, even on 5 year fixed rates that I can't access.

Apparently not, that is what is causing all the confusion. And if you take Nationwide they do for certain term accounts and don’t for others, So it’s not a black or white situation even within the same institution,which is madness.

bristolleedsfan

metrobus said:

Ocelot said:

Swipe said:

If the banks were made to report all interest to HMRC annually regardless of term, that would solve the problem. 

I thought they did. All my banks report yearly, even on 5 year fixed rates that I can't access.

. And if you take Nationwide they do for certain term accounts and don’t for others, So it’s not a black or white situation even within the same institution,which is madness.

What experience/evidence have you had/got . "And if you take Nationwide they do for certain term accounts and don’t for others"

metrobus

They state it on the link posted earlier. https://www.nationwide.co.uk/savings/help/when-your-interest-is-paid/

Look  at Fixed rate online bonds and you will see a word missing that is included in most of their other account types.

bristolleedsfan

metrobus said:

They state it on the link posted earlier. https://www.nationwide.co.uk/savings/help/when-your-interest-is-paid/

Look  at Fixed rate online bonds and you will see a word missing that is included in most of their other account types.

Where does it state/say within link posted that Nationwide do not report interest annually to HMRC for any particular fixed rate bond?

Whilst it is possible that I was given incorrect info, this has been re-posted.relayed many times and nobody has contradicted what has been said either Nationwide saying something different or anyones actual experience.

I asked them after they launched multi-year bonds where interest was paid at maturity .and specifically mentioned reason for question hence them liasing with Nationwide tax team.

bristolleedsfan     

 Forumite

22 July at 10:48PM edited 22 July at 10:51PM

metrobus said:

I think Nationwide declares everything at the end of the period and not annually.

Soon after Nationwide launched current style of online bonds they told me after liasing with Nationwide tax team that Interest on multi year fixed rates get reported to HMRC annually.

bristolleedsfan

metrobus said:

They state it on the link posted earlier. https://www.nationwide.co.uk/savings/help/when-your-interest-is-paid/

Look  at Fixed rate online bonds and you will see a word missing that is included in most of their other account types.

Within thread on same subject you said you were "hoping" Nationwide would report Interest to HMRC annually, I would have thought both easy and prudent to have asked them.

https://forums.moneysavingexpert.com/discussion/comment/79681043/#Comment_79681043

ScarletBea

From my experience, all banks and institutions (including Nationwide) report interest to HMRC when that amount is made available to the customer.
If the interest is capitalised then that is not available and so it's not reported.

Albermarle

masonic said:

badmemory said:

Is this why many fixed term accounts say access only by closure as that would presumably cover them to file annually.  I had my simple assessment (not that it is simple) through last week & my interest adds up to what they say apart from my NS&I interest.  That includes fixes of 2 yrs & over with access by closure.

I don't think many fixed term accounts permit early access by closure. If they did, then they would certainly fall outside of this discussion, as they'd not be fixed term in the traditional sense. These are usually referred to as limited access accounts.

I am only aware of First Direct ( £100 penalty on a one year fix account) and Halifax ( similar to ISA penalties)