Self-Assesment for Savings Interest over £10k

SavvySaver24

Just added up the interest earnt on my accounts, and due to a couple of joint accounts with small amounts in, halving that has put be £106 over the £10k interest limit before having to do a self-assessment. This is for the 2023/2024 Tax Year.

Couple of questions:

1) Do HMRC write to tell me I need to complete this form? I only knew about it from this forum and there's only one small line on it on the government website. How does Joe Public know this stuff if HMRC doesn't tell them?

2) Do I need to include the interest earnt in my ISAs even though it isn't taxable?

3) My tax code has changed a couple of times through the year as a result of interest earnt in 2022 / 2023 AND as a result of them estimating what they think I'll earn in interest 2023/2024. So I'm confused why I have to do a tax return when the banks supply them with this information? Am I going to end up doubly taxed given they've already been taking additional tax through the year for that they estimate I'll earn?

4) Everything about self assessment tax returns seems to be in regards to if you run a business which I don't (I'm PAYE). Anyone know when specifically for savings & investments interest this has to be completed by?

5) There is so little information about a tax return for this specific instance. What type of information do I need to have gathered in advance? Is it details and account numbers of all my accounts and all the interest?

I won't earn this much in interest again (combination of sticking more in ISAs, big expenses coming out and predictably lower interest rates). How do I ensure they don't 'estimate' the interest I'll earn for 2024/2025 so I'm out of pocket.

eskbanker

SavvySaver24 said:

Just added up the interest earnt on my accounts, and due to a couple of joint accounts with small amounts in, halving that has put be £106 over the £10k interest limit before having to do a self-assessment. This is for the 2023/2024 Tax Year.

Couple of questions:

1) Do HMRC write to tell me I need to complete this form? I only knew about it from this forum and there's only one small line on it on the government website. How does Joe Public know this stuff if HMRC doesn't tell them?
Not sure if/when they'll write, but in general taxpayers are expected to be aware of their obligations.

2) Do I need to include the interest earnt in my ISAs even though it isn't taxable?
No.

3) My tax code has changed a couple of times through the year as a result of interest earnt in 2022 / 2023 AND as a result of them estimating what they think I'll earn in interest 2023/2024. So I'm confused why I have to do a tax return when the banks supply them with this information?
The tax return is you declaring what your taxable income is - they will indeed cross-refer this to the information they receive from elsewhere, but that doesn't eliminate your obligation to make a declaration yourself.

Am I going to end up doubly taxed given they've already been taking additional tax through the year for that they estimate I'll earn?
No.

4) Everything about self assessment tax returns seems to be in regards to if you run a business which I don't (I'm PAYE). Anyone know when specifically for savings & investments interest this has to be completed by?
https://www.gov.uk/self-assessment-tax-returns/deadlines - there's no differentiation based on reasons for completing.

5) There is so little information about a tax return for this specific instance. What type of information do I need to have gathered in advance? Is it details and account numbers of all my accounts and all the interest?
Yes, you only need to declare the total figure on the form but need to be able to show your workings if asked. 

I won't earn this much in interest again (combination of sticking more in ISAs, big expenses coming out and predictably lower interest rates). How do I ensure they don't 'estimate' the interest I'll earn for 2024/2025 so I'm out of pocket.
You can correct estimated figures via your online tax account.

Answers inline above....

friolento

SavvySaver24 said:

Just added up the interest earnt on my accounts, and due to a couple of joint accounts with small amounts in, halving that has put be £106 over the £10k interest limit before having to do a self-assessment. This is for the 2023/2024 Tax Year.

Couple of questions:

1) Do HMRC write to tell me I need to complete this form? I only knew about it from this forum and there's only one small line on it on the government website. How does Joe Public know this stuff if HMRC doesn't tell them?

If you received over £10k of interest, HMRC will get in touch several months down the line, after the banks have completed their reporting to HMRC.

You can check here whether you need to complete an SA: https://www.gov.uk/check-if-you-need-tax-return

The form to fill in is online.

As you are only a small amount over £10k, and because you don't expect to bust £10k interest again, I would call and ask them whether there is an easier way than SA. Although it is fairly straight forward to fill in an SA if your only taxablae income is from employment and from savings interest.

Are you aware you will owe a lot more than the tax on the £106, as you have bust your personal allowance for interest - £1k if you are a BR tax payer, £500 if you pay HR tax. If your total interest is £10,106, you owe 20% tax on £9,106 (£1,821), or 40% on £9,606 (£3,842)

SavvySaver24

Oh yes sadly fully aware it's 40% tax on the lot apart from my £500 PA.

Dazed_and_C0nfused

SavvySaver24 said:

Oh yes sadly fully aware it's 40% tax on the lot apart from my £500 PA.

Don't forget that the £500 is still taxable income and is taxed, albeit at 0%.

If you are impacted by HICBC or tapered Personal Allowance then that £500 could increase your overall tax liability despite being taxed at 0% 😢

SavvySaver24

Is it better to wait for them to get in touch or get ahead of the game? Or does it make no difference? And ISA interest definitely doesn't need including right? At least I'll only have to do this once but for the sake of £106 seems a bit much when they already get the information.

Bigwheels1111

I breached the 10k limit this year and will for near on 6 more years.
I already have access to self assessment as was self employed in the past.
My plan is to gather tax statements from each account and then just file a return when I have the exact figure.
I could do it in 3 days, but I opened so many easy access accounts and closed them as new rates appeared 
I might have missed off a few pounds from my total.
ISA interest, is not included at all. It’s as if it does not exist.

SavvySaver24

Gone on to to try and register but none od these options cover the ovee £10k from interest in savings or investments. What am i meant to select?

friolento

I would select "untaxed income which cannot be coded in PAYE"

SavvySaver24

But it can be coded in PAYE? They've coded it for the 2022 to 2023 tax year?

Dazed_and_C0nfused

SavvySaver24 said:

But it can be coded in PAYE? They've coded it for the 2022 to 2023 tax year?

I just think it's badly worded.