How does HMRC know our savings amounts?

t0rt0ise

People always say that if you owe savings tax they will adjust your tax code, however that didn't happen to me, they just sent a bill.

Dazed_and_C0nfused

t0rt0ise said:

People always say that if you owe savings tax they will adjust your tax code, however that didn't happen to me, they just sent a bill.

There are certain rules HMRC apply when determining if tax owed from a prior tax year can be collected via your tax code.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye12070

And for those that self assess they might file their return too late (after 30 December) or tick a box on the return to say they don't want it to be included in their tax code.

Shylock_249

RG2015 said:

Kim_13 said:

The providers will submit a report saying that they have paid X in interest to you. I can’t think of a bank or building society that doesn’t have my NI number, the PSA likely being why they now ask for it rather than only asking for it if you are applying to open an ISA. HMRC will compare that amount against any tax free allowance or PSA available to the individual with that NI number (whether £1,000, £500 or nil) to work out how much tax if any they need to recover.

If you are close to the limit or will pay tax, it’s worth checking the figures the bank give to ensure that you do not overpay due to an error in the information HMRC hold.

I asked this question (whether HMRC have overstated interest on your P800) on the tax board and nobody has responded as yet.

My conclusion would be that HMRC may understate, if a bank doesn't report interest, but never overstate it.

Well I can confirm that they do get it wrong.  I contacted HMRC and asked for a print out of the details they held on my account for FY 2022 - 23. They sent a list containing 18 entries both "Estimates" and "Actual".  Of the 18 only 7 were actual accounts.  The actual figures were correct, these being the figures submitted by the financial institutions.  I phoned HMRC and went through the details. The assistant deleted spurious entries.  One building society had yet to submit their figures; the assistant said they should have the details by (IIRC) 21 September.  Eventually after going through the figures, waiting until the building society reported and requesting an updated list my figure and HMRC's agreed.  They sent me a P800 and I paid the money I owed them rather than have them correct the figure through PAYE.

My wife is the joint holder of all our taxable accounts, therefore her figures should be the same as mine.  I requested a list of her figures, phoned through the differences with the assistant. I thought that was that but last week my wife received her P800 and the figure shown for BBSI (Banks and Building Society Interest) is higher by £197.00 (£196.58), so I shall have to phone them again and ask for a list and phone through the discrepancies.

wiseonesomeofthetime

My records show that, for the 2022-23 tax year, I received £1,250 in interest from Savings. As such, I have been waiting for the October update to my HMRC records to show how much tax I need to pay, in order to avoid them playing with my tax code.

To my surprise, my records show that I have paid all due taxes for 2022-23.

I can only assume that they have either (a) written off the amount of tax I owe as it is a low figure (c.£50), or (b) not all my savings' providers have reported to the HMRC yet.

Time will tell.

RG2015

Shylock_249 said:

RG2015 said:

Kim_13 said:

The providers will submit a report saying that they have paid X in interest to you. I can’t think of a bank or building society that doesn’t have my NI number, the PSA likely being why they now ask for it rather than only asking for it if you are applying to open an ISA. HMRC will compare that amount against any tax free allowance or PSA available to the individual with that NI number (whether £1,000, £500 or nil) to work out how much tax if any they need to recover.

If you are close to the limit or will pay tax, it’s worth checking the figures the bank give to ensure that you do not overpay due to an error in the information HMRC hold.

I asked this question (whether HMRC have overstated interest on your P800) on the tax board and nobody has responded as yet.

My conclusion would be that HMRC may understate, if a bank doesn't report interest, but never overstate it.

Well I can confirm that they do get it wrong.  I contacted HMRC and asked for a print out of the details they held on my account for FY 2022 - 23. They sent a list containing 18 entries both "Estimates" and "Actual".  Of the 18 only 7 were actual accounts.  The actual figures were correct, these being the figures submitted by the financial institutions.  I phoned HMRC and went through the details. The assistant deleted spurious entries.  One building society had yet to submit their figures; the assistant said they should have the details by (IIRC) 21 September.  Eventually after going through the figures, waiting until the building society reported and requesting an updated list my figure and HMRC's agreed.  They sent me a P800 and I paid the money I owed them rather than have them correct the figure through PAYE.

My wife is the joint holder of all our taxable accounts, therefore her figures should be the same as mine.  I requested a list of her figures, phoned through the differences with the assistant. I thought that was that but last week my wife received her P800 and the figure shown for BBSI (Banks and Building Society Interest) is higher by £197.00 (£196.58), so I shall have to phone them again and ask for a list and phone through the discrepancies.

I am only asking about P800 interest figures.

I am not referring to estimates used for a tax year that is yet to be assessed. Were your 11 estimates included on your P800 and hence part of the calculation for tax due?

Regarding your wife’s P800, it is not clear yet that HMRC have overstated the interest figure for 2022/2023. However this will be established when you have the full breakdown.

RG2015

Shylock_249 said:

RG2015 said:

Kim_13 said:

The providers will submit a report saying that they have paid X in interest to you. I can’t think of a bank or building society that doesn’t have my NI number, the PSA likely being why they now ask for it rather than only asking for it if you are applying to open an ISA. HMRC will compare that amount against any tax free allowance or PSA available to the individual with that NI number (whether £1,000, £500 or nil) to work out how much tax if any they need to recover.

If you are close to the limit or will pay tax, it’s worth checking the figures the bank give to ensure that you do not overpay due to an error in the information HMRC hold.

I asked this question (whether HMRC have overstated interest on your P800) on the tax board and nobody has responded as yet.

My conclusion would be that HMRC may understate, if a bank doesn't report interest, but never overstate it.

Well I can confirm that they do get it wrong.  I contacted HMRC and asked for a print out of the details they held on my account for FY 2022 - 23. They sent a list containing 18 entries both "Estimates" and "Actual".  Of the 18 only 7 were actual accounts.  The actual figures were correct, these being the figures submitted by the financial institutions.  I phoned HMRC and went through the details. The assistant deleted spurious entries.  One building society had yet to submit their figures; the assistant said they should have the details by (IIRC) 21 September.  Eventually after going through the figures, waiting until the building society reported and requesting an updated list my figure and HMRC's agreed.  They sent me a P800 and I paid the money I owed them rather than have them correct the figure through PAYE.

My wife is the joint holder of all our taxable accounts, therefore her figures should be the same as mine.  I requested a list of her figures, phoned through the differences with the assistant. I thought that was that but last week my wife received her P800 and the figure shown for BBSI (Banks and Building Society Interest) is higher by £197.00 (£196.58), so I shall have to phone them again and ask for a list and phone through the discrepancies.

This is interesting. My P800 referred to my interest as “Personal Savings Allowance at 0%”, not BBSI.

Perhaps this is because my figure is less than £1,000, but it is curious that they have used different terminology.

Shylock_249

RG2015 said:

Shylock_249 said:

RG2015 said:

Kim_13 said:

The providers will submit a report saying that they have paid X in interest to you. I can’t think of a bank or building society that doesn’t have my NI number, the PSA likely being why they now ask for it rather than only asking for it if you are applying to open an ISA. HMRC will compare that amount against any tax free allowance or PSA available to the individual with that NI number (whether £1,000, £500 or nil) to work out how much tax if any they need to recover.

If you are close to the limit or will pay tax, it’s worth checking the figures the bank give to ensure that you do not overpay due to an error in the information HMRC hold.

I asked this question (whether HMRC have overstated interest on your P800) on the tax board and nobody has responded as yet.

My conclusion would be that HMRC may understate, if a bank doesn't report interest, but never overstate it.

Well I can confirm that they do get it wrong.  I contacted HMRC and asked for a print out of the details they held on my account for FY 2022 - 23. They sent a list containing 18 entries both "Estimates" and "Actual".  Of the 18 only 7 were actual accounts.  The actual figures were correct, these being the figures submitted by the financial institutions.  I phoned HMRC and went through the details. The assistant deleted spurious entries.  One building society had yet to submit their figures; the assistant said they should have the details by (IIRC) 21 September.  Eventually after going through the figures, waiting until the building society reported and requesting an updated list my figure and HMRC's agreed.  They sent me a P800 and I paid the money I owed them rather than have them correct the figure through PAYE.

My wife is the joint holder of all our taxable accounts, therefore her figures should be the same as mine.  I requested a list of her figures, phoned through the differences with the assistant. I thought that was that but last week my wife received her P800 and the figure shown for BBSI (Banks and Building Society Interest) is higher by £197.00 (£196.58), so I shall have to phone them again and ask for a list and phone through the discrepancies.

I am only asking about P800 interest figures.

I am not referring to estimates used for a tax year that is yet to be assessed. Were your 11 estimates included on your P800 and hence part of the calculation for tax due?

Regarding your wife’s P800, it is not clear yet that HMRC have overstated the interest figure for 2022/2023. However this will be established when you have the full breakdown.

Para 1. The figures on my wife's P800 are wrong.  HMRC have got it wrong.

Para 2. As I wrote I'd asked for a list of the interests which HMRC held, contacted had them correct the figures, this was before they sent me my P800, so I've no way of knowing that if I hadn't contacted them they might have included the estimates.

Para 3. As far as HMRC is concerned they had the full breakdown hence them sending out the P800. The one building society (2 taxable accounts) which had NOT reported when I was sorting out my own must have reported because when I received my P800 (NOT requested) after the extended reporting date, their and my figures agreed.  I've got to assume that HMRC didn't intend to send out a P800 for my wife on the assumption that they'd have to send out another later on.  It is for consideration that the extra £197.oo is for an estimated account?  

One of the difficulties I have is that when I take out a one year fixed rate bond (in joint names) I'm issued with an account number.  On maturity if I opt to reinvest the building society issues me with a new number. HMRC uses the previous account number as an estimate and ALSO uses the actual interest paid on the new account.  With variable rate accounts (ready cash for me) the account number is retained for the duration.  In the previous FY I'd moved some money in variable accounts from one account to another which generated a new account number.

Shylock_249

RG2015 said:

Shylock_249 said:

RG2015 said:

Kim_13 said:

The providers will submit a report saying that they have paid X in interest to you. I can’t think of a bank or building society that doesn’t have my NI number, the PSA likely being why they now ask for it rather than only asking for it if you are applying to open an ISA. HMRC will compare that amount against any tax free allowance or PSA available to the individual with that NI number (whether £1,000, £500 or nil) to work out how much tax if any they need to recover.

If you are close to the limit or will pay tax, it’s worth checking the figures the bank give to ensure that you do not overpay due to an error in the information HMRC hold.

I asked this question (whether HMRC have overstated interest on your P800) on the tax board and nobody has responded as yet.

My conclusion would be that HMRC may understate, if a bank doesn't report interest, but never overstate it.

Well I can confirm that they do get it wrong.  I contacted HMRC and asked for a print out of the details they held on my account for FY 2022 - 23. They sent a list containing 18 entries both "Estimates" and "Actual".  Of the 18 only 7 were actual accounts.  The actual figures were correct, these being the figures submitted by the financial institutions.  I phoned HMRC and went through the details. The assistant deleted spurious entries.  One building society had yet to submit their figures; the assistant said they should have the details by (IIRC) 21 September.  Eventually after going through the figures, waiting until the building society reported and requesting an updated list my figure and HMRC's agreed.  They sent me a P800 and I paid the money I owed them rather than have them correct the figure through PAYE.

My wife is the joint holder of all our taxable accounts, therefore her figures should be the same as mine.  I requested a list of her figures, phoned through the differences with the assistant. I thought that was that but last week my wife received her P800 and the figure shown for BBSI (Banks and Building Society Interest) is higher by £197.00 (£196.58), so I shall have to phone them again and ask for a list and phone through the discrepancies.

This is interesting. My P800 referred to my interest as “Personal Savings Allowance at 0%”, not BBSI.

Perhaps this is because my figure is less than £1,000, but it is curious that they have used different terminology.

My Wife's P800 shows on the last paragraph:

"Explanation:

Untaxed Interest
Estimated amount of Untaxed Interest : £16xx.oo
Your Actual amount of Untaxed Interest: £32xx.oo

Then on the very last line:
Explanation:
The reason you have paid too little tax is bbsi"

The figure £32xx.oo is wrong by £197.oo

She owes them £329.oo

It would really help if we could view the interest details held by HMRC on the Government Gateway, or at least be able to opt on line to have one sent out through the post.

Kim_13

Shylock_249 said:

RG2015 said:

Shylock_249 said:

RG2015 said:

Kim_13 said:

The providers will submit a report saying that they have paid X in interest to you. I can’t think of a bank or building society that doesn’t have my NI number, the PSA likely being why they now ask for it rather than only asking for it if you are applying to open an ISA. HMRC will compare that amount against any tax free allowance or PSA available to the individual with that NI number (whether £1,000, £500 or nil) to work out how much tax if any they need to recover.

If you are close to the limit or will pay tax, it’s worth checking the figures the bank give to ensure that you do not overpay due to an error in the information HMRC hold.

I asked this question (whether HMRC have overstated interest on your P800) on the tax board and nobody has responded as yet.

My conclusion would be that HMRC may understate, if a bank doesn't report interest, but never overstate it.

Well I can confirm that they do get it wrong.  I contacted HMRC and asked for a print out of the details they held on my account for FY 2022 - 23. They sent a list containing 18 entries both "Estimates" and "Actual".  Of the 18 only 7 were actual accounts.  The actual figures were correct, these being the figures submitted by the financial institutions.  I phoned HMRC and went through the details. The assistant deleted spurious entries.  One building society had yet to submit their figures; the assistant said they should have the details by (IIRC) 21 September.  Eventually after going through the figures, waiting until the building society reported and requesting an updated list my figure and HMRC's agreed.  They sent me a P800 and I paid the money I owed them rather than have them correct the figure through PAYE.

My wife is the joint holder of all our taxable accounts, therefore her figures should be the same as mine.  I requested a list of her figures, phoned through the differences with the assistant. I thought that was that but last week my wife received her P800 and the figure shown for BBSI (Banks and Building Society Interest) is higher by £197.00 (£196.58), so I shall have to phone them again and ask for a list and phone through the discrepancies.

This is interesting. My P800 referred to my interest as “Personal Savings Allowance at 0%”, not BBSI.

Perhaps this is because my figure is less than £1,000, but it is curious that they have used different terminology.

My Wife's P800 shows on the last paragraph:

"Explanation:

Untaxed Interest
Estimated amount of Untaxed Interest : £16xx.oo
Your Actual amount of Untaxed Interest: £32xx.oo

Then on the very last line:
Explanation:
The reason you have paid too little tax is bbsi"

The figure £32xx.oo is wrong by £197.oo

She owes them £329.oo

It would really help if we could view the interest details held by HMRC on the Government Gateway, or at least be able to opt on line to have one sent out through the post.

I wouldn’t be surprised if that change came soon - nothing like the calls coming in to prompt a change in the system (as with the purchase of missing NI years.) Simplifying the tax system is no bad thing in the run up to an election.

No doubt with interest rates being so low previously there wasn’t much call for the information. If you’d pay no tax on the interest anyway, it didn’t matter if the figures were out (unless of course you were on the edge of a tax band.)

mebu60

badmemory said:

Better to file self assessment which is fairly easy if you keep records than to get stuck with the simple assessment which they prefer & HMRC do themselves.  Then you have to check their figures.  Unfortunately DWP seem incapable of giving HMRC the correct state pension figure, an overestimate normally, which does not help.

For those mathematically minded.  Simple assessment costs more in tax normally than self assessment because when you file self assessment they knock the pennies off each amount then add them up.  In simple assessment they add them all up first.  Yes only 20/40p but irritating none the less but if there are 2 million pensioners on simple assessment that is an extra income of at least £400k.  You can see why they like simple assessment.

I am assuming you are aware that the correct state pension figure is the amount due to be paid within the tax year not the amount actually paid. But will mention just in case it's helpful to anyone as it is a bit of an anomaly.