Tax on multiple changing savings accounts

JSmith321

I have multiple savings accounts to spread risks and move savings in the rapidly changing savings market. How do people know how much tax should be paid at the end of the year on interest where money and interest rates are constantly changing and moving between accounts to achieve the best interest. Does HMRC simply over estimate in their favour. 

EthicsGradient

To know exactly how much interest you will get from a particular account, you need to keep your own records of what you put in and take out, and any interest rate changes, with a spreadsheet. You can make estimates to keep it simpler, with rough figures. Different accounts credit interest, or pay it to a current account, at different times of the year, but you can look at the accounts to check that you get what you expect.

Every provider must tell you, at the end of each tax year, how much interest you received from them in the previous year, either sending you post/email, or when you log on online (or, though if you are involved in "rapidly changing savings" it's unlikely this applies to you, by updating a passbook, I suppose). They then give those figures to HMRC as well. If you pay tax under PAYE, HMRC should alter your tax code to collect anything you owe from previous years. If you self-assess, you put the figures from the providers on your return.

Beddie

You need to keep a record of all the interest in each savings account. A very simple spreadsheet, with Provider, account number, dates opened/closed and interest received, is what you need.

Probably stating the obvious, but use up your ISA allowance if you don't already, then tax is no longer an issue for at least some of your savings.

gravel_2

Moving money doesn't change anything. If an institution pays your interest they will report it to HMRC. Likewise if you receive interest you should be keeping a record of it, even if moving/closing accounts.

subjecttocontract

JSmith321 said:

I have multiple savings accounts to spread risks and move savings in the rapidly changing savings market. How do people know how much tax should be paid at the end of the year on interest where money and interest rates are constantly changing and moving between accounts to achieve the best interest. Does HMRC simply over estimate in their favour. 

Just get you PA to keep a record on a spreadsheet.
It will make it easier for end of year accounts.

wmb194

I use MS Money 2005 to keep track of all my accounts, interest and investments but other money management databases are available e.g., Ace Money.