Exceeded PSA 22-23

I exceeded my Personal Saving Allowance of £1000 for the 22-23 tax year by £122 so was expecting to be due tax of £24.40.  I am employed and my salary uses my full tax-free amount.

I was looking at my Personal Tax Account today and it states that:

6th April 2022 to 5th April 2023
You paid the right amount of tax.
There is nothing more to be paid for this year.

I assume there is a cutoff amount, under which they don't bother with small amounts of tax due, is this assumption correct?

Comments

  • JRF2398 said:
    I exceeded my Personal Saving Allowance of £1000 for the 22-23 tax year by £122 so was expecting to be due tax of £24.40.  I am employed and my salary uses my full tax-free amount.

    I was looking at my Personal Tax Account today and it states that:

    6th April 2022 to 5th April 2023
    You paid the right amount of tax.
    There is nothing more to be paid for this year.

    I assume there is a cutoff amount, under which they don't bother with small amounts of tax due, is this assumption correct?

    In certain situations yes.

    I would say you are more likely to have underpaid by £26.20 (£122 x 20% + £1.80 due to how PAYE tax code work) but that may well be within the tolerance HMRC apply.

    https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye93075
  • Thanks for the reply and the link.
  • RG2015
    RG2015 Posts: 5,755
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    edited 5 November 2023 at 11:46AM
    JRF2398 said:
    I exceeded my Personal Saving Allowance of £1000 for the 22-23 tax year by £122 so was expecting to be due tax of £24.40.  I am employed and my salary uses my full tax-free amount.

    I was looking at my Personal Tax Account today and it states that:

    6th April 2022 to 5th April 2023
    You paid the right amount of tax.
    There is nothing more to be paid for this year.

    I assume there is a cutoff amount, under which they don't bother with small amounts of tax due, is this assumption correct?

    It is unwise to assume anything.

    It is also possible that one or more of your savings providers has failed to report your interest to HMRC, resulting in them showing less than £1,000 interest.

    The general advice is that you are responsible for paying the right amount of tax. Some people may keep quiet and others would pursue the issue with HMRC to ensure that they had paid the correct amount of tax.

    Alternatively HMRC may yet receive notification of the missing interest and send you a P800 with details of your unpaid tax and how it may be paid/collected.
  • True, it is unwise to assume anything where HMRC are involved.
  • Albermarle
    Albermarle Posts: 21,185
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    I am employed and my salary uses my full tax-free amount.

    Due to the savings starter rate, then you will not pay any tax on interest until your taxable income ( including savings interest ) exceeds £18,750. If you are a low earner this could affect you.

  • RG2015
    RG2015 Posts: 5,755
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    edited 5 November 2023 at 11:57AM
    JRF2398 said:
    I exceeded my Personal Saving Allowance of £1000 for the 22-23 tax year by £122 so was expecting to be due tax of £24.40.  I am employed and my salary uses my full tax-free amount.

    I was looking at my Personal Tax Account today and it states that:

    6th April 2022 to 5th April 2023
    You paid the right amount of tax.
    There is nothing more to be paid for this year.

    I assume there is a cutoff amount, under which they don't bother with small amounts of tax due, is this assumption correct?

    In certain situations yes.

    I would say you are more likely to have underpaid by £26.20 (£122 x 20% + £1.80 due to how PAYE tax code work) but that may well be within the tolerance HMRC apply.

    https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye93075
    This is very interesting.

    Is there any responsibility to advise HMRC that they have underestimated the amount of interest received, by virtue of them stating on their website that no further tax is due?

    Is it a valid defence to say you assumed that the unpaid tax was within their tolerance?

    What is a reasonable level to tolerance to assume? Unpaid tax of £26.40, £50, £100, £150, £200.........?

    Edited for a further question.

    Does the following statement on a PTA online qualify as a tax calculation already issued, or can that just be updated at a future date?

    6th April 2022 to 5th April 2023
    You paid the right amount of tax.
    There is nothing more to be paid for this year.
  • JRF2398
    JRF2398 Posts: 5
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    edited 5 November 2023 at 12:12PM
    I am employed and my salary uses my full tax-free amount.

    Due to the savings starter rate, then you will not pay any tax on interest until your taxable income ( including savings interest ) exceeds £18,750. If you are a low earner this could affect you.

    I earn c.£27K so this wouldn't apply to me, but useful info for someone else.
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