Declaring savings interest earned over £1k

Doctor_Who

It would be very useful if you could see the interest that each bank reported to HMRC. My understanding is that Raisin isn't a bank and so is not required to submit a report to HMRC. If you don't do SA, then you need to send the correct figures to HMRC at the end of the tax year. This could get confusing with some banks reporting the interest and other 'banks' not....I foresee a lot of misreporting in years to come.

Sea_Shell

Doctor_Who said:

It would be very useful if you could see the interest that each bank reported to HMRC. My understanding is that Raisin isn't a bank and so is not required to submit a report to HMRC. If you don't do SA, then you need to send the correct figures to HMRC at the end of the tax year. This could get confusing with some banks reporting the interest and other 'banks' not....I foresee a lot of misreporting in years to come.

I can understand Raisin as an entity NOT having to report to HMRC, as they are not a bank, but surely the underlying holding BANKS have to, don't they!?!    

The likes of Investec, Gatehouse, Paragon, Tandem etc etc. with whom your money is actually held and who pay the interest at the end of the term.   

It could be a massive hole in reporting if not.   

Doctor_Who

but surely the underlying holding BANKS have to, don't they!?!    

That doesn't seem to be the case. I don't know exactly how it works between Raisin and, say, Gatehouse, but Gatehouse may not have all of your details (Raisin hold those). If so, then Gatehouse cannot report your interest to HMRC. I think I've read (maybe on here!) that HL Active Savings uses some 'collective savings' (where they pool savers' money) - again, the deposit bank could not identify a specific customer to report their interest to HMRC. 

Albermarle

Doctor_Who said:

but surely the underlying holding BANKS have to, don't they!?!    

That doesn't seem to be the case. I don't know exactly how it works between Raisin and, say, Gatehouse, but Gatehouse may not have all of your details (Raisin hold those). If so, then Gatehouse cannot report your interest to HMRC. I think I've read (maybe on here!) that HL Active Savings uses some 'collective savings' (where they pool savers' money) - again, the deposit bank could not identify a specific customer to report their interest to HMRC. 

It sounds like a big mess building up for the future...

Sea_Shell

That makes sense, if that's how they do it.

As an individual you don't actually hold an account with X bank, just a ring fenced (and protected) "slice" as it were.


I feel many customers will fall foul of non reporting of interest, that will trigger tax, especially with rates as high as they are now.  Assuming HMRC can ever catch up with them!

masonic

Sea_Shell said:

So, how would HMRC find out about interest earned on the Raisin platform if the banks don't report* and you don't submit a tax return?   So easy to fall through the cracks for the unwary.

* I thought all banks were obliged to submit this information, regardless of whether they're under an "umbrella" ?

If it was picked up at all, it would probably be as a result of an unrelated investigation into either a taxpayer or one of these services.

My understanding is that the partner banks do not have the direct relationship (or potentially even sufficient information about underlying customers) to make the necessary declaration themselves, and the concierge service doesn't consider itself in scope of the rules. It would not surprise me to see a court case brought by HMRC in the future around this issue.

Doctor_Who

masonic said:

Sea_Shell said:

So, how would HMRC find out about interest earned on the Raisin platform if the banks don't report* and you don't submit a tax return?   So easy to fall through the cracks for the unwary.

* I thought all banks were obliged to submit this information, regardless of whether they're under an "umbrella" ?

If it was picked up at all, it would probably be as a result of an unrelated investigation into either a taxpayer or one of these services.

My understanding is that the partner banks do not have the direct relationship (or potentially even sufficient information about underlying customers) to make the necessary declaration themselves, and the concierge service doesn't consider itself in scope of the rules. It would not surprise me to see a court case brought by HMRC in the future around this issue.

Interestingly, the ones I've used in the past (Raisin, HL Active Savings and Flagstone) all issue annual statements of the interest earned (HL don't specify the partner bank(s), the other two do). So they have the relevant information, but I suppose they reason that they didn't pay the interest so why should they report it to HMRC! Seems a mess, much like the taxation of interest at maturity or annually for multi-year fixed rates.

Sea_Shell

Doctor_Who said:

masonic said:

Sea_Shell said:

So, how would HMRC find out about interest earned on the Raisin platform if the banks don't report* and you don't submit a tax return?   So easy to fall through the cracks for the unwary.

* I thought all banks were obliged to submit this information, regardless of whether they're under an "umbrella" ?

If it was picked up at all, it would probably be as a result of an unrelated investigation into either a taxpayer or one of these services.

My understanding is that the partner banks do not have the direct relationship (or potentially even sufficient information about underlying customers) to make the necessary declaration themselves, and the concierge service doesn't consider itself in scope of the rules. It would not surprise me to see a court case brought by HMRC in the future around this issue.

Interestingly, the ones I've used in the past (Raisin, HL Active Savings and Flagstone) all issue annual statements of the interest earned (HL don't specify the partner bank(s), the other two do). So they have the relevant information, but I suppose they reason that they didn't pay the interest so why should they report it to HMRC! Seems a mess, much like the taxation of interest at maturity or annually for multi-year fixed rates.

I'd forgotten about that.   I've just checked my paperwork and yes, I have their Statement for the 22/23 tax year, saved.

The grand sum of £10.17 

Will be a tad more than that for 23/24 !

Sea_Shell

I've just been having a look at my Gov Gateway account and I can't see where the option is to voluntarily tell HMRC about the £ of interest earned, to ensure they have the full picture (without being required to submit a self-assessment tax return)

23/24 - Estimated at £123* (will be significantly more than that)
22/23 - Being worked on, so no breakdown available to view
21/22 - Just says no tax to pay, no option to view how that's calculated (no PAYE for that year)
20/21 - As above

Where do you go to do this (assuming you want to)?


* I have no idea how they arrived at that figure, as it doesn't match any old years assumed carried forward.

Doctor_Who

When you are on the 'Your PAYE Income Tax summary for 6 April 2023 to 5 April 2024' webpage in your Gov.uk account select 'Add missing investment income' from the bottom right of the page. After various pages asking about address etc you have the option of telling HMRC what the investment income is (untaxed interest is one option).

Edit - I think you can also use 'Add missing income from another source'. I've not had to do this for a few years!