Oxbury Bank - Months of Apparent Inadequacy

masonic

refluxer said:

Despite the fact that interest technically isn't accessible for 90 days, you can be sure that Oxbury will be still reporting it to HMRC as being received on the day it was credited to the account just like an easy access account, so I anticipate I'll be doing the same when I have to self-assess this year, to avoid any discrepancies/headaches. 

Banks are required to report interest to HMRC when it is credited rather than when it arises for tax, so yes, there would be a discrepancy if you report it in line with ITTOIA05/S370 and SAIM2400 as HMRC requires for self assessment. The only difference between this and a multi-year fixed saver is that the impact on tax is more likely to be negligible. Though discrepancies don't seem to lead to headaches. I think HMRC will be aware the info provided through SA will generally be more accurate and complete.

Zopa_Trooper

nottsphil said:

Zopa_Trooper said:

I had a 90-day notice account with them for a few months, It closed yesterday when they paid me the full balance plus interest. I found them to be excellent in every respect. Speak as you find I say.

So in which tax year are you declaring the annual interest paid last year? If it's credited to the account, we are told that it should only be declared in this year because it wasn't accessible due to you not giving notice until c. 31st March!
Maybe it's dependent on the date that annual interest is credited to an account, so if credited on 31st January it's assessed in the current year but if credited a month later it belongs in the following year because it is not accessible for 90 days.

I don't declare any.

Olinda99

could you not just look on the statements or transactions for the account and see how much interest you were paid in the year

allegro120

masonic said:

allegro120 said:

nottsphil said:

Zopa_Trooper said:

I had a 90-day notice account with them for a few months, It closed yesterday when they paid me the full balance plus interest. I found them to be excellent in every respect. Speak as you find I say.

So in which tax year are you declaring the annual interest paid last year? If it's credited to the account, we are told that it should only be declared in this year because it wasn't accessible due to you not giving notice until c. 31st March!
Maybe it's dependent on the date that annual interest is credited to an account, so if credited on 31st January it's assessed in the current year but if credited a month later it belongs in the following year because it is not accessible for 90 days.

This account pays monthly interest, so any interest credited between 06/04/23 and 05/04/24 counts towards last tax year and anything after towards this tax year.

That's only correct if Oxbury permit instant access with a penalty, or interest is paid to an external account. If you must observe the 90 day notice period, then interest arises for tax 90 days after it is credited, except interest at closure which is accessible immediately.

They don't permit instant access with a penalty.  Interest is paid every month with reference to the date of receipt of first deposit and credited to the account.  For SAR, I've added all interest payments credited during the tax year.  Should I deduct the interest paid between 6th January and 5th April?

allegro120

Olinda99 said:

could you not just look on the statements or transactions for the account and see how much interest you were paid in the year

That's what I do. I record anual interest payments as they arrive and add up monthly interest payments when the tax year ends.  Anual interest statements from provides are sporadic and inconsistent. I have accounts with 52 institutions, it's easier to calculate the interest myself in April rather than waiting for random statements.

masonic

allegro120 said:

masonic said:

allegro120 said:

nottsphil said:

Zopa_Trooper said:

I had a 90-day notice account with them for a few months, It closed yesterday when they paid me the full balance plus interest. I found them to be excellent in every respect. Speak as you find I say.

So in which tax year are you declaring the annual interest paid last year? If it's credited to the account, we are told that it should only be declared in this year because it wasn't accessible due to you not giving notice until c. 31st March!
Maybe it's dependent on the date that annual interest is credited to an account, so if credited on 31st January it's assessed in the current year but if credited a month later it belongs in the following year because it is not accessible for 90 days.

This account pays monthly interest, so any interest credited between 06/04/23 and 05/04/24 counts towards last tax year and anything after towards this tax year.

That's only correct if Oxbury permit instant access with a penalty, or interest is paid to an external account. If you must observe the 90 day notice period, then interest arises for tax 90 days after it is credited, except interest at closure which is accessible immediately.

They don't permit instant access with a penalty.  Interest is paid every month with reference to the date of receipt of first deposit and credited to the account.  For SAR, I've added all interest payments credited during the tax year.  Should I deduct the interest paid between 6th January and 5th April?

Yes, that would arise for tax in this tax year, being the earliest you could have accessed it.

1spiral

masonic said:

allegro120 said:

masonic said:

allegro120 said:

nottsphil said:

Zopa_Trooper said:

I had a 90-day notice account with them for a few months, It closed yesterday when they paid me the full balance plus interest. I found them to be excellent in every respect. Speak as you find I say.

So in which tax year are you declaring the annual interest paid last year? If it's credited to the account, we are told that it should only be declared in this year because it wasn't accessible due to you not giving notice until c. 31st March!
Maybe it's dependent on the date that annual interest is credited to an account, so if credited on 31st January it's assessed in the current year but if credited a month later it belongs in the following year because it is not accessible for 90 days.

This account pays monthly interest, so any interest credited between 06/04/23 and 05/04/24 counts towards last tax year and anything after towards this tax year.

That's only correct if Oxbury permit instant access with a penalty, or interest is paid to an external account. If you must observe the 90 day notice period, then interest arises for tax 90 days after it is credited, except interest at closure which is accessible immediately.

They don't permit instant access with a penalty.  Interest is paid every month with reference to the date of receipt of first deposit and credited to the account.  For SAR, I've added all interest payments credited during the tax year.  Should I deduct the interest paid between 6th January and 5th April?

Yes, that would arise for tax in this tax year, being the earliest you could have accessed it.

I've been thinking about this and it may not be as clear cut as it seems. Although as a standard, the interest is inaccessible in the tax year credited if after 6th Jan, there is a scenario whereby you can access it in the tax year paid. That is if you serve notice on or before 5th Jan to close the account. In that case, all interest credited between 6th Jan and 5th April will be paid on 5th April when the account closes. This scenario is somewhat different to fixed term accounts which don't usually have an option to close them before the term ends. Not sure whether HMRC consider non closure of an account as an acceptable deferral method.

DeepSporran

Email from Oxbury this morning:

Your End of Tax Year Personal Easy Access Account (Issue 1): 4.94% AER statement is ready to view

Haven’t logged into the account to check yet but I assume it will be there

mebu60

allegro120 said:

Olinda99 said:

could you not just look on the statements or transactions for the account and see how much interest you were paid in the year

That's what I do. I record anual interest payments as they arrive and add up monthly interest payments when the tax year ends.  Anual interest statements from provides are sporadic and inconsistent. I have accounts with 52 institutions, it's easier to calculate the interest myself in April rather than waiting for random statements.

I do the same, recording interest as it arrives and totalling monthly payments at the tax year end, plus a quick check through all accounts on a rainy April day to ensure the balance is as per my master sheet and cross check that all interest received in the previous tax year has been recorded. 30-40 accounts, doesn't take overly long. 

masonic

1spiral said:

masonic said:

allegro120 said:

masonic said:

allegro120 said:

nottsphil said:

Zopa_Trooper said:

I had a 90-day notice account with them for a few months, It closed yesterday when they paid me the full balance plus interest. I found them to be excellent in every respect. Speak as you find I say.

So in which tax year are you declaring the annual interest paid last year? If it's credited to the account, we are told that it should only be declared in this year because it wasn't accessible due to you not giving notice until c. 31st March!
Maybe it's dependent on the date that annual interest is credited to an account, so if credited on 31st January it's assessed in the current year but if credited a month later it belongs in the following year because it is not accessible for 90 days.

This account pays monthly interest, so any interest credited between 06/04/23 and 05/04/24 counts towards last tax year and anything after towards this tax year.

That's only correct if Oxbury permit instant access with a penalty, or interest is paid to an external account. If you must observe the 90 day notice period, then interest arises for tax 90 days after it is credited, except interest at closure which is accessible immediately.

They don't permit instant access with a penalty.  Interest is paid every month with reference to the date of receipt of first deposit and credited to the account.  For SAR, I've added all interest payments credited during the tax year.  Should I deduct the interest paid between 6th January and 5th April?

Yes, that would arise for tax in this tax year, being the earliest you could have accessed it.

I've been thinking about this and it may not be as clear cut as it seems. Although as a standard, the interest is inaccessible in the tax year credited if after 6th Jan, there is a scenario whereby you can access it in the tax year paid. That is if you serve notice on or before 5th Jan to close the account. In that case, all interest credited between 6th Jan and 5th April will be paid on 5th April when the account closes. This scenario is somewhat different to fixed term accounts which don't usually have an option to close them before the term ends. Not sure whether HMRC consider non closure of an account as an acceptable deferral method.

Well that comes back to the "except interest at closure which is accessible immediately" in my previous post.

It doesn't matter whether you could have closed the account earlier than you did. Just as it doesn't matter if you could have opted for interest to be paid away. What matters are the contractual accessibility terms in force at the point the interest is credited. If you've already given notice to close the account, you will have contractual access to all interest that has not already arisen when it closes.

Fixed term accounts can be considered a special class of notice accounts where the notice period is equal to the fixed term remaining. The customer can voluntarily give notice at any point and they will get their money back when the term ends, just as they would if they let the account run for the full term. Some fixed term accounts permit the saver to change their interest option part way through the term to pay away instead of compounding. HMRC has confirmed that even though they could exercise this option, unless they do exercise it, interest would arise at maturity (the end of the notice period for this special class of notice accounts ).

However, I think it is a great question for the HMRC forum if you remain unconvinced.