Savings interest query

Gemstars2024

Hi all, 

I'm expecting to go over my £1000 personal savings interest allowance this year for the first time slightly by around £100-£200. I expect this to be a one off. 

As I understand it, I won't need to declare anything (I'm employed and tax on earnings is paid through my employer), HMRC will know how much interest I've earned in total across my accounts and therefore know how much tax I need to pay? 

I've also read this will be sorted out by a change in tax code for the following year? Is there a way to avoid this as I don't expect to go over my allowance next, or subsequent years. 

Thank you

Dazed_and_C0nfused

Gemstars2024 said:

Hi all, 

I'm expecting to go over my £1000 personal savings interest allowance this year for the first time slightly by around £100-£200. I expect this to be a one off. 

As I understand it, I won't need to declare anything (I'm employed and tax on earnings is paid through my employer), HMRC will know how much interest I've earned in total across my accounts and therefore know how much tax I need to pay? 

I've also read this will be sorted out by a change in tax code for the following year? Is there a way to avoid this as I don't expect to go over my allowance next, or subsequent years. 

Thank you

Yes, when HMRC send you the calculation you can simply go on your Personal Tax Account and pay the tax owed.  Or sending them a cheque is probably still an option.

This works on a 3 year cycle so you have plenty of time to do this.  For example if you owe the tax for 2024-25 HMRC will review things during the next tax year (2025-26) and send you a calculation for 2024-25 around this time next year and the tax owed would then be included in your 2026-27 tax code. 

Separately HMRC will update your 2025-26 tax code on the assumption that you will receive the same interest again in 2025-26 and you can then provide them with your own estimates of the interest you expect to receive for 2025-26 if you know this will be less than it was in 2024-25.