Self Assessment Query Regarding over £10k Savings Interest

JulieGil

I am a housewife, not employed and do not receive a pension. This year my investment interest from my savings accounts will exceed £10k. I am allowed to earn £18570 in savings interest per annum without paying income tax (£12570 personal tax allowance, £5000 starting rate for savings and £1000 personal savings allowance). Would I need to complete  a Self Assessment Form as my interest will be over £10k even though it does not exceed the tax allowance £18570?

eskbanker

Yes, you need to self-assess with over £10K of (non-ISA) savings interest income, even if the end result will be no tax being payable.

Swipe

Yes, you'll still need to register for SA if that £10K is outside of a tax wrapper even though not taxable due to the starting rate + personal allowance. But the good news is it's only about 10 mins of work once you are familiar with it. There are many useful video guides and tutorials out there. The key to simplicity and a painless SA, is to keep track of all your interest in a spreadsheet as and when you receive it.

Bigwheels1111

Once regestered it is very easy, After Name address, Ni number,email and phone number if you want to give it.

You tick NO to employed and NO to self employed.

On the page titled Income.

Enter interest amount in,

Box 2 Untaxed UK interest – amounts which

have not had tax taken off
If you have an account that pays you gross interest
(for example, a bank or building society account),

put the gross amount in box 2.

I have the PDF file but I cant upload it as format is not accepted.

Google

SA100_tax_return_English_2023

First result should be GOV.UK Tax return 2023.

It might change a bit for 2024 but will give you a good idea of what you need to fill out.

What_time_is_it

I might have to do this next year.
Is it only required if you have "earned" over £10k in interest in a single tax year? And am I right in thinking that the crucial date is when the interest in actually paid, not when it it incurred?

Is the key to making this easy keeping a running total of all interest payments between 6th April 2024 and 5th April 2024? 

Bigwheels1111

What_time_is_it said:

I might have to do this next year.
Is it only required if you have "earned" over £10k in interest in a single tax year? And am I right in thinking that the crucial date is when the interest in actually paid, not when it it incurred?

Is the key to making this easy keeping a running total of all interest payments between 6th April 2024 and 5th April 2024? 

Yes, Its that simple.

Keep records.

The olny issue that some come up againt is, Interest.

When can you access it.

If interest is paid away, ie you get it and can spend it this week it is taxed for 23/24.

If savings are in a 3 year fixed rate and interest is compounded and not paid out until 2026

You would get taxed on the whole lot in 2026.

Some say this, but some say not.

Albermarle

If savings are in a 3 year fixed rate and interest is compounded and not paid out until 2026

You would get taxed on the whole lot in 2026.

Some say this, but some say not.

And the 'some' include HMRC, who seem to say something different every time they are asked.

spider42

Ignore HMRC's "guidance" that you must register for Self Assessment if your interest is more than £10k. This is completely false. HMRC's website is factually incorrect and has no basis in law whatsoever (as has often been pointed out by judges in tax tribunals). There is no legal obligation for you (or indeed anybody else) to register for Self Assessment. Your only legal obligations are to notify HMRC if you owe them some tax, or to file a tax return if they issue you with a notice under Section 8 TMA 1970 asking you to complete one.

If your only income is interest, and it is under £18,570 (or £17,340 if you've done a Marriage Allowance transfer), then generally you won't owe any tax (unless you've done something else to create a liability, e.g. Gift Aid donations).

If you have no tax liability, then you are under no obligation to take any action yourself, despite what the HMRC website will incorrectly tell you. You are only required to file a return if HMRC have issued a notice under Section 8 TMA1970 to do so. It would be a waste of yours (and HMRC's) time to register yourself for Self Assessment where no tax is due.

Swipe

spider42 said:

It would be a waste of yours (and HMRC's) time to register yourself for Self Assessment where no tax is due.

I'd rather waste their time and 10 minutes of mine once a year than risk a fine based on someone's opinion on an internet forum.

Dazed_and_C0nfused

Swipe said:

spider42 said:

It would be a waste of yours (and HMRC's) time to register yourself for Self Assessment where no tax is due.

I'd rather waste their time and 10 minutes of mine once a year than risk a fine based on someone's opinion on an internet forum.

What fine could there be 🤔

spider42

Swipe said:

spider42 said:

It would be a waste of yours (and HMRC's) time to register yourself for Self Assessment where no tax is due.

I'd rather waste their time and 10 minutes of mine once a year than risk a fine based on someone's opinion on an internet forum.

That's the whole point. They can't fine you for not submitting a tax return unless they have issued a tax return notice. I'm a Chartered Tax Advisor and Chartered Accountant, although admittedly I'm still only "somebody on an internet forum". What are your tax qualifications?