Self assessment tax return - how do I know if my interest is taxed or untaxed?

eskbanker

DQY said:

Hi all, apologies for disappearing - have a v tiny baby and got called to other duties!

@Dazed_and_C0nfused - thanks, I'm not sure I totally follow. My starting question was whether, as someone who is employed and pays income tax via PAYE (and usually doesn't complete a Self Assessment tax return), tax on my savings interest is dealt with through adjustments to my tax code (and hence already taken), or whether it is untaxed until I report total interest in the self assessment form. The piece that confuses me is this line on the gov.uk site:

"HMRC automatically deducts tax on any savings interest you owe, if you’re employed or get a pension."

This applies to me (I am employed), hence why I am confused about whether I report the interest as taxed or untaxed.

That was already answered earlier on (untaxed) - D&C's post doesn't contradict that.

Middle_of_the_Road

DQY said:

"HMRC automatically deducts tax on any savings interest you owe, if you’re employed or get a pension."

This applies to me (I am employed), hence why I am confused about whether I report the interest as taxed or untaxed.

 HMRC are simply asking-  at the point you were paid the interest, did the bank/ building society deduct any tax?
Banks used to deduct tax, and you had to claim it back,,, not the case anymore.

The Interest is paid to you without any tax (you could owe) deducted, and you enter it in the untaxed box.
The highlighted above is misleading, and only means they will assess your figures and tax you accordingly.

Reed_Richards

Untaxed. 

Go back a few years and banks and other financial institutions would automatically deduct tax from your savings interest (and pass it on to HMRC) on the assumption that you were a basic rate taxpayer.  If you were on a low income and did not reach the tax threshold you could tell the bank and they would not deduct tax.  So it was possible that you could have some savings interest that was taxed at source and some that was not.  This question is a hangover from those days.  Interest taxed at source has gone, except perhaps in very rare circumstances.  But the question on the tax form remains.