Paying Tax on Savings Interest and Dividends

Cloth_of_Gold

I've asked questions about this on another thread but am still not clear, and in any event that thread is about something else so I have decided to open my own.

My questions are these:

1. If you have non-ISA savings income in excess of the £1000 personal allowance (but under £10K) and have a pension or pensions such that your income is too great for you to qualify for the starting savings rate how will HMRC recover the tax you owe? Will they (a) amend your tax code, (b) send you a bill and allow you to make a bank transfer or send a cheque to pay it all in one go, or (c) might it depend and, if so, on what?

2. If they do decide to amend your tax code do they write and tell you that you owe them £x and they are amending your tax code? If so, do you then have the option of sending them an immediate payment for the full sum so that they don't amend your tax code, or do you just have to accept the coding change?

3. If you have dividend income in excess of the new lower £1K allowance do you have to notify HMRC of this yourself and how do you do this?

4. How will HMRC recover the tax you owe on the dividend income? Will they (a) amend your tax code, (b) send you a bill and allow you to make a bank transfer or send a cheque to pay it all in one go, or (c) might it depend and, if so, on what?

5. As above, if they do decide to amend your tax code do they write and tell you that you owe them £x and they are amending your tax code? If so, do you then have the option of sending them an immediate payment for the full sum so that they don't amend your tax code, or do you just have to accept the coding change?

Sorry to have so many questions but we just want to get it clear in our minds once and for all.

Dazed_and_C0nfused

1.  = c).  That is the preferred option but if it is not possible, for example the amount is £3,000 or more, you will be sent a Simple Assessment and have to pay it direct to HMRC (payable by no earlier than 31 January after the end of the tax year).

2.  Yes.  There is usually a delay before the tax code change applies (working on a 3 year cycle, year 1 earn the interest, year 2 HMRC assess the tax due, year 3 tax owed is included in the tax code for year 3) so you can make direct payment if you wish before year 3 starts. 

3.  Yes, you need to notify HMRC of taxable dividend income. There is no allowance for dividends and if there are no unused Personal Allowances then the first £1,000 is taxed.  Albeit at the dividend nil rate (0%).

4.  In exactly the same way as interest.  You don't get a separate calculation for each source of income, it's one calculation for all of your taxable income.

5.  See 2.

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

grumbler

1. for my friend it was (a) when he reached some certain age and his state pension was increased (he also has a bigger private pension). It wasn't big interest on savings, but I expect this to be the same to some degree.

PeskyBlunder

1 & 2. I received a P800 about 2 weeks ago saying I owed £52.60. I logged onto the Government Gateway Personal Tax Account site and paid it by debit card but they said they would have changed my tax code if I hadn't done this. There was also a warning that I might have to pay interest on the amount owing at some point if I didn't pay it - on the PTA not the P800. I get the state pension and an occupational pension.