Manually pay tax on interest

gettingthehangofthis

Hello all, I can't get through to HMRC and wondered if anyone knows the answer.

I've gone over the £1,000 personal savings allowance as some recent savings account interest was over this amount. Is it possible to pay the tax owed on this as a one-off manual payment (eg with a debit card) rather than them changing my tax code?

Thank you in advance

born_again

You do get a option to make a payment, once they advise you on the amount. Daughter got this, but it took till around August before she received any notification for 2022/23 period.
I'm guessing that you are referring to 2023/24 period.
End of the day, told daughter to just let them adjust tax code as it is effect a interest free loan to pay back the interest from the previous year & this is MSE  😍

gettingthehangofthis

Thank you @born_again! That’s good to know it takes them a while. Would rather pay off in one as a tax code change may affect my mortgage affordability checks but you’re right about it being effectively a free loan. 

Dazed_and_C0nfused

gettingthehangofthis said:

Thank you @born_again! That’s good to know it takes them a while. Would rather pay off in one as a tax code change may affect my mortgage affordability checks but you’re right about it being effectively a free loan. 

What is likely to happen is that later this summer you will get a calculation showing the tax owed for 2023-24.  This will usually be collected by an adjustment to your 2025-26 tax code, starting in April 2025.

So you have plenty of time to pay it off direct if you would prefer and then it won't impact your 2025-26 tax code.

But at roughly the same time as the calculation for 2023-24 is issued HMRC will review your 2024-25 tax code on the assumption that you will receive the same interest again in 2024-25.

This adjustment is just to collect extra tax towards 2024-25 and is nothing to do with collecting the tax owed for 2023-24.

If you know the interest will be less you can contact HMRC to get your code revised but you don't need to do that, any overpayment will be automatically refunded in summer 2025 once HMRC have received the interest details for 2024-25.

gettingthehangofthis

Amazing thank you @Dazed_and_C0nfused for the detailed info 

josephine82

Yes! This happened to me for the previous tax year. Got a letter to confirm. Logged into my HMRC tax account, paid online. Simples!