How does HMRC know our savings amounts?

BooJewels

Can I ask a supplementary question in view of what @mebu60 has just posted - if I get interest paid monthly and get a payment each from 2 fixes in April - one on 3rd and one on 9th.  My thinking is that the one on the 3rd would be declared in the earlier year just ending and the one on the 9th would be declared in the next tax year - as those are the tax years in which I received the money and it was spendable.

But do they actually count it to the day - so the one received on the 3rd would be accounted for as a month + 2 days in the earlier tax year and the one on the 9th would be something like 26 days in the earlier year and 4 days in the later year?

HMRC have made a complete mess of my tax and NI account when someone decided during an online chat session to just delete my business as a source of income and remove my status as self employed.  I'm not looking forward to this particular aspect being added into the mix.

Ocelot

Shylock_249 said:

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.

They used to do the former, but cancelled it a few years ago.

RG2015

mebu60 said:

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. 

Thank you for this information which was news to me.. I have just looked at my P800 and this is what they have done. It does sound like I am paying tax on money I haven't actually received, albeit a small amount.

This year with a 10.1% increase the discrepancy will be larger than in previous years.

badmemory

mebu60 said:

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. 

The correct state pension figure is normally one week at the old rate & 51 weeks at the new.  So far the DWP has always reported 52 weeks at the new rate.

Brie

eskbanker said:

Brie said:

eskbanker said:

Brie said:

fyi - I've a reasonably unique name so have no doubt HMRC could track me down easily enough if they wanted to.  People I knew decades back in other countries have tracked me via facebook so it should be a dawdle even without the DoB & NINo really.  But for the John Smiths of this country things will be more complicated of course.

Not sure if we're talking at cross purposes but the fact remains that even if there were data submissions from banks without dates of birth, they would still have name and address, so DoB is only needed as a differentiator where there are multiple people with the same name at the same address.

Brie said:

eskbanker said:

Brie said:

The whole thing sounds very complex and makes me wonder if the foreign system of requiring everyone to submit a tax return would actually be more practical.  

Not sure how mandatory tax returns would address data matching issues, and they'd obviously cause a massive incremental workload for HMRC, given that less than 40% of taxpayers are currently required to submit them?

And fyi - mandatory tax returns are simple enough in that the bank would send me a tax receipt and I would submit that as part of my return along with info from my employer (P60 essentially) plus charitable donation receipts, medical receipts, education receipts etc......  (so looking forward to doing this again after 30+ years in a few months....)

Again, that's not the point being made - mandatory returns might indeed be relatively simple for the submitter but the point was that they'd create significantly more work for HMRC for little obvious benefit, and it's still unclear exactly how that would simplify data matching if DoB was missing?

I think we're agreeing but from different points of view.

My unique name would help me now but if it was me when I was still living at home there could be 5 people at the address with very similar names that might be confused (even confused my dad frankly....)

And yes mandatory tax returns do cause a lot of work for a tax department - the fact that they might now be done online should eliminate a lot of work though.  So the bank sends me an official receipt for tax paid, I submit that with my tax return and the tax office can tick off what I've submitted against the long list they've received from the bank.  The only ones they then need to investigate are the ones that aren't submitted, ticked off the list.  They can then look at the various John Smiths or Bries living at whatever address.  And likely fine those who haven't submitted anything at all.

RG2015

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.

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.

Firstly, many thanks for sharing this information with us. However, I am a bit hazy on the figures on your wife's tax account.

You said earlier;

"......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."

Until HMRC give you the full list including the £196.58 you cannot say categorically that they have got it wrong.

At this point, either HMRC have included £196.58 in error or your have excluded an interest stream of £196.58.

From my perspective it would be very disturbing if HMRC had made an error. But I would prefer to know for sure and be prepared for this happening for me.

vic_sf49

Ocelot said:

Shylock_249 said:

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.

They used to do the former, but cancelled it a few years ago.

I was looking for this recently and couldn't find it.

Then I wondered if I'd misremembered seeing it.

Then wondered if I no longer got that info listed, as I'm under the tax threshold & PSA etc.

Thanks for confirming that I hadn't imagined it. I hope it does come back online, as phoning for that info is hell on earth. Phone + tax + HMRC = ugh nope. 

Shylock_249

RG2015 said:

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.

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.

Firstly, many thanks for sharing this information with us. However, I am a bit hazy on the figures on your wife's tax account.

You said earlier;

"......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."

Until HMRC give you the full list including the £196.58 you cannot say categorically that they have got it wrong.

At this point, either HMRC have included £196.58 in error or your have excluded an interest stream of £196.58.

From my perspective it would be very disturbing if HMRC had made an error. But I would prefer to know for sure and be prepared for this happening for me.

Well I'll eat my calculator if my figures are incorrect. But I do accept that I shall have to see the list.

I do all the banking and financial business and keep meticulous records. My wife suffered a stroke 2 years ago etc. In the FY 2021 - 22 I added my wife's name to all our taxpaying accounts, neither of us has a sole account. By my reckoning both of our BBSI for FY 2022 - 23 will be the same.

It's always for consideration that a bank/building society reports a joint account as being a sole account. But as I wrote HMRC and my figures agree. 

eskbanker

Brie said:
I think we're agreeing but from different points of view.

My unique name would help me now but if it was me when I was still living at home there could be 5 people at the address with very similar names that might be confused (even confused my dad frankly....)

And yes mandatory tax returns do cause a lot of work for a tax department - the fact that they might now be done online should eliminate a lot of work though.  So the bank sends me an official receipt for tax paid, I submit that with my tax return and the tax office can tick off what I've submitted against the long list they've received from the bank.  The only ones they then need to investigate are the ones that aren't submitted, ticked off the list.  They can then look at the various John Smiths or Bries living at whatever address.  And likely fine those who haven't submitted anything at all.

I don't think we're agreeing, especially on the mandatory tax return issue, where it still seems to me that you're both downplaying the workload involved in processing these (which would obviously entail significantly more than 'ticking off' savings interest submissions) and failing to make a case that there'd actually be any benefit!

mebu60

BooJewels said:

Can I ask a supplementary question in view of what @mebu60 has just posted - if I get interest paid monthly and get a payment each from 2 fixes in April - one on 3rd and one on 9th.  My thinking is that the one on the 3rd would be declared in the earlier year just ending and the one on the 9th would be declared in the next tax year - as those are the tax years in which I received the money and it was spendable.

But do they actually count it to the day - so the one received on the 3rd would be accounted for as a month + 2 days in the earlier tax year and the one on the 9th would be something like 26 days in the earlier year and 4 days in the later year?

HMRC have made a complete mess of my tax and NI account when someone decided during an online chat session to just delete my business as a source of income and remove my status as self employed.  I'm not looking forward to this particular aspect being added into the mix.

What you say in para 1 is correct. My previous comment relates solely to HMRC treatment of state pension.