Declaring savings interest earned over £1k

Dazed_and_C0nfused

Doctor_Who said:

Dazed_and_C0nfused said:

Sea_Shell said:

It's quite worrying that when you Google this subject you mainly get answers along the lines of "you don't need to do anything, as your savings providers will report to HMRC", when clearly, as we've discussed, they all don't.

I couldn't find any info about voluntarily telling them of differing amounts, outside of needed to do a full self assessment.


I'm hoping to amend DHs interest for the current year, as they are assuming he'll have over £1000 (which he did a couple of years ago) and are taxing his pension on that amount.

Would they then automatically adjust his current tax code?

(He's awaiting a refund for last tax year, once they tally up, should be by November?)

If it makes a difference yes.

But he will need to provide details for each individual not just a single global figure.

So if you do SA you can just provide a single figure for total savings interest earned, but if you use your personal tax account on Gov.uk you need to provide a complete breakdown of the interest earned in each account?

That seems to be the case yes.

SA is definitely just a single figure (for untaxed interest) and there have been numerous posters on here who have provided updates to HMRC and mentioned having to give details for each individual account.

In most situations I think that's a waste of time as it all comes out in the wash when the post end of tax year review is done.

But there will be instances where people feel hard done to paying tax in the current year when they know less is really due following a change in circumstances that HMRC would ordinarily only find out out about at a later date.

Sea_Shell

Dazed_and_C0nfused said:

Doctor_Who said:

Dazed_and_C0nfused said:

Sea_Shell said:

It's quite worrying that when you Google this subject you mainly get answers along the lines of "you don't need to do anything, as your savings providers will report to HMRC", when clearly, as we've discussed, they all don't.

I couldn't find any info about voluntarily telling them of differing amounts, outside of needed to do a full self assessment.


I'm hoping to amend DHs interest for the current year, as they are assuming he'll have over £1000 (which he did a couple of years ago) and are taxing his pension on that amount.

Would they then automatically adjust his current tax code?

(He's awaiting a refund for last tax year, once they tally up, should be by November?)

If it makes a difference yes.

But he will need to provide details for each individual not just a single global figure.

So if you do SA you can just provide a single figure for total savings interest earned, but if you use your personal tax account on Gov.uk you need to provide a complete breakdown of the interest earned in each account?

That seems to be the case yes.

SA is definitely just a single figure (for untaxed interest) and there have been numerous posters on here who have provided updates to HMRC and mentioned having to give details for each individual account.

In most situations I think that's a waste of time as it all comes out in the wash when the post end of tax year review is done.

But there will be instances where people feel hard done to paying tax in the current year when they know less is really due following a change in circumstances that HMRC would ordinarily only find out out about at a later date.

Quite.  We'd rather have the money earning ~6% in our account 😉, even if it is only ~£20 a month that's being deducted.

Sea_Shell

Wow, they really don't make the process easy do they.   

I found the box that says to amend or add an "investment" (untaxed interest), but I have no idea whether "adding" £9.15, will override the £1300 they are currently assuming will be the untaxed interest.   I don't want to make it worse!!

Is there not just a button to mark the £1300 as wrong?   

The £9.15 is from a matured RS account, which has "finished" in that respect, although further small amounts of interest will be earned during the rest of the tax year on other accounts.    Do you put that this "addition" has ended? 

Doctor_Who

If you're adding a 'missing investment income' then I don't see why it would overwrite any existing figure. As far as I can see there is no way to edit (or report as incorrect) the savings interest figure that is shown in the estimated tax calculation; it seems to be fixed by HMRC based on what the banks report. I think the only way to change this figure is by contacting HMRC.

I did find a Q/A on the HMRC forum, part of the answer is below:

If you are not required to complete a tax return, there is no set form for declaring investment income.

Financial institutions will declare savings interest that is not held in ISA accounts to HMRC, and we will update our records accordingly.

If you wish to do this before then, you will need to provide details of the accounts that you receive interest from by contacting our Income Tax team by telephone or in writing.

https://community.hmrc.gov.uk/customerforums/pt/7d1f4086-b2dd-ed11-9ac4-00155d9c773c

Sea_Shell

The trouble is they assume the same interest figures going forwards for effectively another 2 tax years from the previous declarations (21/22)!!

Damn those pesky maturing 5 year fixes😉

Hopefully once they sort* 22/23 (refund due) they'll automatically update 23/24 to match
🤞


*Although what's the chances they'll believe someone can go from £1300 to zero, without further investigation 😉 

Sea_Shell

Sea_Shell said:

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.

Well, I've just solved the mystery of the 'estimated' £123 of interest for the current tax year.   

From my own records (for 21/22) I earned £164 of interest BUT, £41 of this was on my P2P account with Loanpad (before I moved it all to their IFISA) which they also don't appear to declare....so that's how they get £123.

If I had needed to pay tax on that £41, I would never have known that it hadn't been reported, if I didn't keep good records.

wrenlegs

I’ve been reading the last 4 pages with interest (pardon the pun!). So, can I just check some info - please bear with me because I’m new to all of this and it feels a bit overwhelming at times.

If hubby earns less income than the personal allowance, (say £7k), he can then earn the rest of his personal allowance in savings interest up to £12.5k or thereabouts PLUS £5k allowance (the starter amount) PLUS £1k that everyone gets. So around £11.5k in savings interest before he needs to pay tax on this? 

If the above is correct, does he need to tell HMRC even though he doesn’t have to pay tax on any of it? 

If I earn over the personal income allowance say £17k, I only get £1k of tax free savings interest. If I don’t go above this (say earn £300 in savings interest), do I need to tell HMRC on my self assessment tax return? (I have to do one this year because I have some income not PAYE for the first time ever).

if you have read this far and respond, then thank you very much in advance!

Dazed_and_C0nfused

wrenlegs said:

I’ve been reading the last 4 pages with interest (pardon the pun!). So, can I just check some info - please bear with me because I’m new to all of this and it feels a bit overwhelming at times.

If hubby earns less income than the personal allowance, (say £7k), he can then earn the rest of his personal allowance in savings interest up to £12.5k or thereabouts PLUS £5k allowance (the starter amount) PLUS £1k that everyone gets. So around £11.5k in savings interest before he needs to pay tax on this? 

If the above is correct, does he need to tell HMRC even though he doesn’t have to pay tax on any of it? 

If I earn over the personal income allowance say £17k, I only get £1k of tax free savings interest. If I don’t go above this (say earn £300 in savings interest), do I need to tell HMRC on my self assessment tax return? (I have to do one this year because I have some income not PAYE for the first time ever).

if you have read this far and respond, then thank you very much in advance!

Nearly correct.

Everyone starts off getting the Personal Allowance, savings starter rate band (£5,000) and savings nil rate band (£1,000).  But non savings non dividend income like earnings, rental income, pension income and self employment profits can impact that, particularly the savings starter rate band.

With earnings of £7,000 and assuming he has applied for Marriage Allowance then he will have £4,310 of unused Personal Allowance to use first.  Then the full savings starter rate band and finally the savings nil rate band.  So £10,310 before any tax is payable.

If his interest is £10,000 or more he should register for Self Assessment even if no tax is owed.

If you earn £17k them you will have £570 of the savings starter rate band available plus the £1,000 savings nil rate band.

You include all taxable income on your Self Assessment return. 

wrenlegs

Dazed_and_C0nfused said:

wrenlegs said:

I’ve been reading the last 4 pages with interest (pardon the pun!). So, can I just check some info - please bear with me because I’m new to all of this and it feels a bit overwhelming at times.

If hubby earns less income than the personal allowance, (say £7k), he can then earn the rest of his personal allowance in savings interest up to £12.5k or thereabouts PLUS £5k allowance (the starter amount) PLUS £1k that everyone gets. So around £11.5k in savings interest before he needs to pay tax on this? 

If the above is correct, does he need to tell HMRC even though he doesn’t have to pay tax on any of it? 

If I earn over the personal income allowance say £17k, I only get £1k of tax free savings interest. If I don’t go above this (say earn £300 in savings interest), do I need to tell HMRC on my self assessment tax return? (I have to do one this year because I have some income not PAYE for the first time ever).

if you have read this far and respond, then thank you very much in advance!

Nearly correct.

Everyone starts off getting the Personal Allowance, savings starter rate band (£5,000) and savings nil rate band (£1,000).  But non savings non dividend income like earnings, rental income, pension income and self employment profits can impact that, particularly the savings starter rate band.

With earnings of £7,000 and assuming he has applied for Marriage Allowance then he will have £4,310 of unused Personal Allowance to use first.  Then the full savings starter rate band and finally the savings nil rate band.  So £10,310 before any tax is payable.

If his interest is £10,000 or more he should register for Self Assessment even if no tax is owed.

If you earn £17k them you will have £570 of the savings starter rate band available plus the £1,000 savings nil rate band.

You include all taxable income on your Self Assessment return. 

Woah. I hadn’t clocked that everyone gets the savings starter rate. Why do they make everything so complicated?! Your post has been very helpful to me so thank you so much. When you say non savings income inc pension can impact the savings starter rate, is what you mean that as your non savings income increases, it eats into the savings starter rate? So if I earned 13k then I’d get £4300 ish of starting savers and then the £1k savings nil rate. Have I got that right?

Dazed_and_C0nfused

Nearly.

The savings starter rate band is withdrawn pound for pound as your non savings non dividend income exceeds your Personal Allowance.

So with earnings of £13,000 you would lose £430 of it and have £4,570 still to use.  Plus the £1,000 savings nil rate band.

If you had earnings of £13,000 and self employment profits of £2,000 then you would have £2,570 of the savings starter rate band left to use.  And then the £1,000 savings nil rate band.