Tax Certificate obligation?

2

Comments

  • masonic said:
    It is worth noting that a certificate of interest cannot be relied upon as a figure for taxable interest, because interest included in a such a certificate (or indeed reported to HMRC) has not necessarily arisen for tax yet.
    Sorry @masonic, I don't follow.  Can you please explain this using a few more words/sentences?  I get interest as it is credited to my account (or to another account if I choose) which is usually monthly or annually.  So I am taxed on all the interest that was credited to me (="arose"?).  At the moment I want to know all the interest that is taxable between 6th April 2022 and 5th April 2023 which I understand is all such interest credited to me between these dates.  Am I wrong?       
    Reed
  • masonic
    masonic Posts: 23,201 Forumite
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    masonic said:
    It is worth noting that a certificate of interest cannot be relied upon as a figure for taxable interest, because interest included in a such a certificate (or indeed reported to HMRC) has not necessarily arisen for tax yet.
    Sorry @masonic, I don't follow.  Can you please explain this using a few more words/sentences?  I get interest as it is credited to my account (or to another account if I choose) which is usually monthly or annually.  So I am taxed on all the interest that was credited to me (="arose"?).  At the moment I want to know all the interest that is taxable between 6th April 2022 and 5th April 2023 which I understand is all such interest credited to me between these dates.  Am I wrong?       
    If you take out a multi-year fixed term account, where interest is credited monthly/annually/quarterly, but is inaccessible until the account matures, then that interest is taxable at maturity, even though some of it was credited in an earlier tax year. See https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2400

  • So how would such interest be reported to HMRC?  I mean, how is it indicated that they should hold off assessing it for tax?
    Reed
  • masonic
    masonic Posts: 23,201 Forumite
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    edited 17 November 2023 at 7:26AM
    So how would such interest be reported to HMRC?  I mean, how is it indicated that they should hold off assessing it for tax?
    HMRC don't receive any information from the banks about this. The onus is on the taxpayer to declare the correct amount if they self-assess. For those who don't complete a tax return, HMRC seems to be burying its head in the sand at present. This has been a rather hot topic of discussion here over the past few months, with MSE even weighing in to confirm with HMRC that this understanding of "arising" is indeed correct.
  • Thanks @masonic.  I only consult this board intermittently so I'm afraid I am unaware of the hot topics.  Presumably if I was I would know the answer to this question but how would you tell HMRC that you earned less interest than they think and get them to believe you?  Fortunately, in my case this is just a hypothetical question. 
    Reed
  • masonic
    masonic Posts: 23,201 Forumite
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    Thanks @masonic.  I only consult this board intermittently so I'm afraid I am unaware of the hot topics.  Presumably if I was I would know the answer to this question but how would you tell HMRC that you earned less interest than they think and get them to believe you?  Fortunately, in my case this is just a hypothetical question. 
    One person has reported phoning HMRC and getting nowhere. I suspect writing to them with the relevant detail would be more fruitful, but the implementation remains quite a mess. I complete a tax return, but am avoiding multi-year fixed accounts with no pay away option. If you have the interest paid to an external account, you can sidestep the whole issue.
  • I just keep accurate records my self every month.
    Each account is on a word document with interest date due.
    Once a month I check it’s been paid and update the total.
    Then if I can be bothered I file my self assessment return.
    Only take 10 minutes a month.
    Fixed and regular savers are easy as it’s once a year they payout.
    Easy access is harder as have opened 15 this year chasing the best rate and leaving a pound or two in the superseded account to keep it open in case of a loyalty saver etc.
  • masonic
    masonic Posts: 23,201 Forumite
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    Ditto, but I record monthly into a spreadsheet at the same time I review the month's transactions across my accounts.
  • Yorkie1
    Yorkie1 Posts: 11,545 Forumite
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    Thanks @wmb194 and @Notepad_Phil

    Yes, I was referring to the standard account where interest is credited every month. No fixed term / multi year scenarios.

    I had been massively overthinking things :smile:
  • Ozzig said:
    Are financial institutions obliged to provide you with a tax certificate ("certificate of interest"), on request if necessary?  They're obliged to tell HMRC the total interest they paid you in the tax year but are they obliged to tell you?

    For context, I have savings with one particular financial institution that says in their FAQ 
    We’re no longer issuing tax certificates ...
    Sainsbury's Bank? 
    https://www.sainsburysbank.co.uk/savings/support

    Right first time.  I accumulated quite a few accounts that are now almost empty but which I never closed.  I really don't want to go through each of these, find the small amount of interest and add up to total.  Particularly not when the bank must have done this themselves to tell HMRC.    



    Not the best answer I know, but HMRC will provide details of what has been declared to them, at least you'd have a list to work from.
    How do you get HMRC to provide you with details of all interest payments you have earned during any tax year
    Is there a simple procedure 

    For what it's worth I prepare my own statement for each bank
    But it would be good to have the info from HMRC as a check to ensure nothing has been missed
    Particularly on closed accounts which may have paid interest but been missed 
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