Paying tax on interest
If you're on a PAYE job; how are you supposed to pay tax on interest? I'm guessing, with interest rates as they are, more people will be paying income tax on interest.
Looking at my main savings account it seems that I earned £586.21 in interest for the financial year of 2022/2023.
I'm a higher rate tax payer so my Personal Savings Allowance is £500. That means I will have £86.21 of taxable income to my name (presumably needing to be paid by the end of January 2024?).
I've tried to find information about how to pay this but it seems there is conflicting information online. The GOV.UK website says:
You pay tax on any interest over your allowance at your usual rate of Income Tax.
If you’re employed or get a pension, HMRC will change your tax code so you pay the tax automatically. To decide your tax code, HMRC will estimate how much interest you’ll get in the current year by looking at how much you got the previous year.
If you complete a Self Assessment tax return, report any interest earned on savings there.
Thanks for any insight.
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