Banks/Building Societies NOT reporting to HMRC by the end of June

Shylock_249

Neither me or my wife had received a P800 for the last FY.

I phoned HMRC yesterday to ask them if they were sending out the forms because last year we’d received them in October and I knew full well that we’d owe them money and I’d rather pay them the money than have my occupational pensions reduced each month.

Last year HMRC included an “estimate” of interest paid along with the “actuals” for my wife’s account.  I was able to request a list of interests received and able to deduce what error HMRC had made, then phone them and get it corrected.

When speaking to the guy at HMRC yesterday I asked him what figure he had for untaxed interest payments.  He gave me a figure of £6482.oo which I know to be £2566.oo less than it should be.  This would indicate that one Building Society has NOT yet reported to HMRC despite that it should have been reported by the end of June.

I asked the guy for print outs of the Interest receipts. Why isn’t this available online rather than phoning to ask for it is beyond me.

I might have shot myself in the foot inasmuch as the P800s generated yesterday will NOT include the £2566 (for both of us – all our taxable accounts are in joint names). 

If I pay the money shown on yesterday’s P800 will HMRC then produce another P800 when the errant Building Society reports the interest figures?  

 

 

 

masonic

If you know the correct figures, then it would be best to share them with HMRC. A number of forumites who do not self assess do this. Saves hassle down the line and as you are phoning anyway...

You should also bear in mind that there are reports of some interest not being reported. For example, accounts obtained through intermediaries such as Raisin have been mentioned.

allegro120

It puzzles me why do we need to declare our income from savings if banks/BS are doing it anyway.  What will happen if I put zero in that box?  I'm relatively new to SA, but so far it looks like they trust me more than banks because I get my tax code changed very soon after I submit my SA which is prior to the deadline for banks.

Hoenir

allegro120 said:

It puzzles me why do we need to declare our income from savings if banks/BS are doing it anyway.  What will happen if I put zero in that box?  I'm relatively new to SA, but so far it looks like they trust me more than banks because I get my tax code changed very soon after I submit my SA which is prior to the deadline for banks.

Not all institutions are yet connected. Onus remains on the taxpayer. Easy enough to do using a Personal Tax Account to provide updated data throughout the tax year.  

masonic

allegro120 said:

It puzzles me why do we need to declare our income from savings if banks/BS are doing it anyway.  What will happen if I put zero in that box?  I'm relatively new to SA, but so far it looks like they trust me more than banks because I get my tax code changed very soon after I submit my SA which is prior to the deadline for banks.

If you put zero in that box knowing it to be untrue, it will certainly accept it, but at some point in the future you may be prosecuted for tax fraud. There are scenarios where you'd be correct in putting zero, for example if the only interest you earned was credited into fixed term accounts that did not permit access during the tax year in question. But this is unlikely to happen in practice as few individuals with long-term fixes have no savings in accessible accounts.

Nick_C

The system just doesn't work.  Personally, I think they should scrap the £1k savings allowance for BR taxpayers and go back to deducting 20% at source. 

Shylock_249

Nick_C said:

The system just doesn't work.  Personally, I think they should scrap the £1k savings allowance for BR taxpayers and go back to deducting 20% at source. 

I agree with that, after all the £1k savings allowance only means a maximum of £200.oo in real money.

My savings interest for FY 2023-24 is £9.05k and adjustments will be either made by me paying HMRC, my preferred option or by HMRC reducing my occupational pensions.

With interest rates being higher this year my savings interest has already reached £13.1k and I'll probably have to complete self assessment for myself and my wife next year.  If I pass away before my wife, I have no idea how she would be able capable of submitting SA returns.  With the old system of banks and building societies deducting the interest a source there would be no need for SA.

Albermarle

Shylock_249 said:

Nick_C said:

The system just doesn't work.  Personally, I think they should scrap the £1k savings allowance for BR taxpayers and go back to deducting 20% at source. 

I agree with that, after all the £1k savings allowance only means a maximum of £200.oo in real money.

My savings interest for FY 2023-24 is £9.05k and adjustments will be either made by me paying HMRC, my preferred option or by HMRC reducing my occupational pensions.

With interest rates being higher this year my savings interest has already reached £13.1k and I'll probably have to complete self assessment for myself and my wife next year.  If I pass away before my wife, I have no idea how she would be able capable of submitting SA returns.  With the old system of banks and building societies deducting the interest a source there would be no need for SA.

In certain sections of the media and people who comment on them, there is a lot of complaining about tax on interest as part of a general whinge about tax in general.
So to remove the PSA would  be unpopular and another stick to beat the Govt with. So probably will not happen.
However the reporting system etc needs improving for sure. 

Beddie

Nick_C said:

The system just doesn't work.  Personally, I think they should scrap the £1k savings allowance for BR taxpayers and go back to deducting 20% at source. 

Probably over 80% of people don't pay any tax on savings. This forum is full of people like us, who do have substantial savings, so we are not a representative sample. 

So I like the allowance as it helps many people. But I completely agree with you that the current system is a mess and could be so much better. HMRC use dated systems that just aren't fit for purpose. They should simply bill people for the tax and stop messing about with tax codes for future years. 

Nick_C

The Government could of course keep the £1k limit, tax interest at source, and then refund tax paid on interest that was less than £1k for BR taxpayers.  The refund could be a nice little Xmas bonus for some people.

I spent a couple of days recently trying to get HMRC to correct their records.  They estimated my interest this year would be about £1300 and changed my tax code, even though they have not finalised last year's (23/24) assessment.  I make sure my interest stays below £1k, because  HMRC are such a nightmare to deal with.  They were assuming I was still going to receive interest on accounts that I closed in 22/23.

The current system is not fit for purpose, and HMRC need to improve the way they operate. 

allegro120

Nick_C said:

The current system is not fit for purpose, and HMRC need to improve the way they operate. 

I second this. I submitted my SA in summer and opted to pay by new tax code next financial year. Shortly after that I had my tax code changed and they started deducting tax from my pension (previous years my income was below the threshold so I didn't have to pay any tax). Looks like the next financial year started in August...
Last week I received a letter asking me to pay my tax bill by the end of January.  I thought it is a bit too much and called HMRC to clarify their position.  CS person said that this is because I didn't select tax code option. I took her about 20 minutes to discover that I did select this option and another 20 minutes to sort it out so I no longer required to pay the bill they sent to me.  I bet many people in same situation would just do what HMRC asked them to do (i.e. double their tax payment).  That's no good.