Declaring savings interest

slinger2

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

Dazed_and_C0nfused

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

Monanore

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

Dazed_and_C0nfused

Monanore said:

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

HMRC won't reduce your 2024-25 tax code now (or later this tax year) to start collecting tax due for 2023-24.

They might (later this tax year) reduce your 2024-25 tax code to start collecting extra tax towards what they estimate you will need to pay for 2024-25 but not for anything owed from 2023-24.

Monanore

Dazed_and_C0nfused said:

Monanore said:

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

HMRC won't reduce your 2024-25 tax code now (or later this tax year) to start collecting tax due for 2023-24.

They might (later this tax year) reduce your 2024-25 tax code to start collecting extra tax towards what they estimate you will need to pay for 2024-25 but not for anything owed from 2023-24.

@Dazed_and_C0nfused

Looking at it again I think you might be right.  So do you think it will be recouped in 25-26  

( i.e "adjustment ( previous years )" on the first P2 for 25-26 ? Or some other way ?

Dazed_and_C0nfused

Monanore said:

Dazed_and_C0nfused said:

Monanore said:

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

HMRC won't reduce your 2024-25 tax code now (or later this tax year) to start collecting tax due for 2023-24.

They might (later this tax year) reduce your 2024-25 tax code to start collecting extra tax towards what they estimate you will need to pay for 2024-25 but not for anything owed from 2023-24.

@Dazed_and_C0nfused

Looking at it again I think you might be right.  So do you think it will be recouped in 25-26  

( i.e "adjustment ( previous years )" on the first P2 for 25-26 ? Or some other way ?

If it can be collected via the tax code (less than £3,000 in tax and one or two other rules which HMRC apply) then yes, the tax owed for 2023-24 will be an underpayment deduction in the 2025-26 tax code.

If it can't be collected via the code then a Simple Assessment calculation will be issued and the tax is then payable direct to HMRC on 31 January 2025 (for 2023-24).  It would be payable later if there is a delay in the Simple Assessment being issued as you should always get 3 months to pay it.

slinger2

Dazed_and_C0nfused said:

Monanore said:

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

HMRC won't reduce your 2024-25 tax code now (or later this tax year) to start collecting tax due for 2023-24.

They might (later this tax year) reduce your 2024-25 tax code to start collecting extra tax towards what they estimate you will need to pay for 2024-25 but not for anything owed from 2023-24.

Indeed. They've reduced my tax code for 2024-25 based on the interest I got in 2022-23 (which was £2k, so they've reduced it by £1k). So my tax code is now 200L (personal allowance - state pension - £1k = £2k). Given the way interest rates have gone in the last couple of years I'm thinking the tax code will go negative pretty soon, if that's possible.

Dazed_and_C0nfused

slinger2 said:

Dazed_and_C0nfused said:

Monanore said:

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

HMRC won't reduce your 2024-25 tax code now (or later this tax year) to start collecting tax due for 2023-24.

They might (later this tax year) reduce your 2024-25 tax code to start collecting extra tax towards what they estimate you will need to pay for 2024-25 but not for anything owed from 2023-24.

Indeed. They've reduced my tax code for 2024-25 based on the interest I got in 2022-23 (which was £2k, so they've reduced it by £1k). So my tax code is now 200L (personal allowance - state pension - £1k = £2k). Given the way interest rates have gone in the last couple of years I'm thinking the tax code will go negative pretty soon, if that's possible.

It is, they are called K codes.

The employer or pension payer adds a national amount to your pay or pension before calculating the tax due.

Bobziz

I'm dealing with a similar issue now and have been on the phone to HMRC today. I had to read them the SAIM guidance related to interest not being subject to tax unless it's accessible, as they weren't aware and kept talking about interest being taxable if it is "credited" to your account.

Long story short, when NW send HMRC the interest paid records, I'll then need to send them evidence as to why the interest isn't accessible and therefore isn't taxable. 

Middle_of_the_Road

Dazed_and_C0nfused said:

slinger2 said:

Dazed_and_C0nfused said:

Monanore said:

Dazed_and_C0nfused said:

slinger2 said:

What about those of us that don't self assess? I had untaxed investment income of ~£4000 in 2023/24. Do I tell them what I think the total is or do I just let HMRC work it out when they've got all data.

It depends, if it's interest from a bank or building society you leave it to HMRC.

If it's dividends you need to notify them.  

@slinger2

That's right :  if your 'investment' is a bank or BSoc account and you do nothing then HMRC will take the figures from their BBSI feed around November '24 and issue a calculation.

But you might be wise to tell them now.  Here's what I think :

As you are in PAYE, not telling them about it during 23-24 means that they will have deducted ~800 too little, in which case they may reduce your tax code by ~4000 for 24-25 to recoup it, which can lead to problems as there are not then many months left in the tax year.   Furthermore,  in the absence of any other information they will assume interest in one tax year will be the same in the next, carry it forward as an estimate and again adjust your tax code.

So I think the best way to avoid complications is to give them a reasonable estimate early in a tax year so that they collect about the right amount through PAYE.

HMRC won't reduce your 2024-25 tax code now (or later this tax year) to start collecting tax due for 2023-24.

They might (later this tax year) reduce your 2024-25 tax code to start collecting extra tax towards what they estimate you will need to pay for 2024-25 but not for anything owed from 2023-24.

Indeed. They've reduced my tax code for 2024-25 based on the interest I got in 2022-23 (which was £2k, so they've reduced it by £1k). So my tax code is now 200L (personal allowance - state pension - £1k = £2k). Given the way interest rates have gone in the last couple of years I'm thinking the tax code will go negative pretty soon, if that's possible.

It is, they are called K codes.

The employer or pension payer adds a national amount to your pay or pension before calculating the tax due.

Should that read notional?

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121490