Savings Interest

Shoeaholic58

This probably has been asked many times but here goes. As the banks etc. I save with have now reported the interest I have earned for 23/24, HMRC have advised I need to pay tax of £1269.00 by end of January 25 or I can simply have it collected via PAYE from April 25 to March 26. Using this information they have estimated that savings interest for 24/25 will be around the same amount, do they start collected it now until the end of this current tax year or do I simply wait until its reported around Oct 25 and expect another tax bill. Hope that makes sense. 

Dazed_and_C0nfused

Shoeaholic58 said:

This probably has been asked many times but here goes. As the banks etc. I save with have now reported the interest I have earned for 23/24, HMRC have advised I need to pay tax of £1269.00 by end of January 25 or I can simply have it collected via PAYE from April 25 to March 26. Using this information they have estimated that savings interest for 24/25 will be around the same amount, do they start collected it now until the end of this current tax year or do I simply wait until its reported around Oct 25 and expect another tax bill. Hope that makes sense. 

You would usually get a new tax code for 24-25 so some, if not all, of the tax is collected by 5 April 2025.  And then once the actual figures for 24-25 are available HMRC will check if any adjustment is due, either extra tax to pay or a refund to you.

Not sure the bit highlighted in bold is true though.

You either need to pay it by 31 January 2025 (if you have received a Simple Assessment, PA302 calculation) or it will be collected via your 25-26 tax code and you can make a voluntary payment against that if you wish (a P800 calculation).

There is no deadline of January 2025 for making a voluntary payment.  Although if that is your preferred option it does make sense to make the payment before HMRC calculate your new tax code for 25-26, which usually happens between January and March.

Shoeaholic58

Thank you so much for this. Yes I did get a new tax code as I received my 1st State Pension payment, so my private pension tax will increase. It just confused me that in my 24/25 Income Calculation they included this estimated interest figure, but I guess them taking some of it until end of tax year makes sense. The bit in bold I realise I did make a error, it advised I needed to pay by end Jan 25 or via PAYE next year, but when I made a partial payment (I intend to pay this off over 3 months) I did get a message that said I had until end of tax year to pay it. I did speak to HMRC who advised paying it by January because as you have said they calculate code for 25/26 between Jan & March. Thanks again, most helpful