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

boingy

I think the system probably works for the vast majority of people. The vast majority of people are not earning more than £1000 in interest and those that do get the tax automatically taken via PAYE if possible. If HMRC make small errors in doing so then, in general, no-one notices especially as tax codes are rounded to the nearest tenner. Of course, here on MSE there is a large concentration of people who earn lots more interest so the system is always going to be tested more by us.

newatc

I wait for HMRC to tell me what they think my savings interest is and then correct them. On past occasions when I did give them details of my savings interest, they ended up duplicating many accounts. 

They are running way behind this year(tax year 23/4) and I've not had correspondence yet. 

Bigwheels1111

I self assess as go over 10k of interest.

I filed on the 16/04/24, not a peep from them yet.

When I view my filing online it say's £0.

But on the main page, 22/23 is still showing.

I keep an exact total of earning to the penny, So I'm  ready for any probing.

If I were taxed as interest was paid I would not have enough to live on.

So quite happy with the way it is.

Dazed_and_C0nfused

Bigwheels1111 said:

I self assess as go over 10k of interest.

I filed on the 16/04/24, not a peep from them yet.

When I view my filing online it say's £0.

But on the main page, 22/23 is still showing.

I keep an exact total of earning to the penny, So I'm  ready for any probing.

If I were taxed as interest was paid I would not have enough to live on.

So quite happy with the way it is.

You are two thirds of the way through the normal window of opportunity they have to investigate your return.

https://www.gov.uk/hmrc-internal-manuals/self-assessment-claims-manual/sacm8010

eskbanker

allegro120 said:

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.

Aren't there two separate issues here?  The tax you owe for 2023/24 should be collected by coding adjustment for 2025/26 if that was your selected option, even though they seem to have messed this up, requiring correction.

However, the adjustment of your 2024/25 code is presumably to collect the tax applicable to the interest they estimate you'll receive in the current year (on the assumption that it'll be the same or similar to the previous year)?  The derivation of your current coding should be explained within your online personal tax account, and you can adjust the expected current year income figures there if necessary....

Dazed_and_C0nfused

eskbanker said:

allegro120 said:

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.

Aren't there two separate issues here?  The tax you owe for 2023/24 should be collected by coding adjustment for 2025/26 if that was your selected option, even though they seem to have messed this up, requiring correction.

However, the adjustment of your 2024/25 code is presumably to collect the tax applicable to the interest they estimate you'll receive in the current year (on the assumption that it'll be the same or similar to the previous year)?  The derivation of your current coding should be explained within your online personal tax account, and you can adjust the expected current year income figures there if necessary....

And that usually only happens because of the way you completed your tax return.

You could have said you didn't want your current tax code amending with the latest info from your return.

There is a specific question about this near the end of the return.

Shylock_249

Albermarle said:

However the reporting system etc needs improving for sure. 

It certainly does need improving!

I received the printouts yesterday.  Admittingly they seem a lot clearer than last's years with only the word "Actual" in the Source column, there are NO estimates but they still show Banks/BS where no payments have been made - closed accounts from previous years.  In my case I have 8 actuals with figures (amounts), correct, and 20 columns showing £0.0.

The one glaring error, and I'll have to phone them up, is that they have shown that the percentage should be 50% (joint account), then the gross figure of £1498.53 (correct) but then the Gross apportioned amount shows £1498.53 when it should be £749.27, ie 50%.  If I'm NOT mistaken that would be an overcharge in tax of £149.85.  

Interest from Families Building Society had NOT been reported to HMRC at the time of request.

Dazed_and_C0nfused

Shylock_249 said:

Albermarle said:

However the reporting system etc needs improving for sure. 

It certainly does need improving!

I received the printouts yesterday.  Admittingly they seem a lot clearer than last's years with only the word "Actual" in the Source column, there are NO estimates but they still show Banks/BS where no payments have been made - closed accounts from previous years.  In my case I have 8 actuals with figures (amounts), correct, and 20 columns showing £0.0.

The one glaring error, and I'll have to phone them up, is that they have shown that the percentage should be 50% (joint account), then the gross figure of £1498.53 (correct) but then the Gross apportioned amount shows £1498.53 when it should be £749.27, ie 50%.  If I'm NOT mistaken that would be an overcharge in tax of £149.85.  

Interest from Families Building Society had NOT been reported to HMRC at the time of request.

I haven't read the fine detail of what and how banks and building societies are meant to report but if the bit highlighted in bold is true and the accounts were closed in a previous tax year then it sounds very much like they are reporting information they shouldn't be.

Not sure how you know interest hasn't been reported by Families Building Society?  That could be the case but isn't it possible they have reported it and HMRC haven't acted on it yet?  Maybe they (Families BS) were late reporting the details for 2023-24?

Nick_C

I don't think the banks etc are reporting data that they should not be.  HMRC are wrongly assuming that if you got interest from an account in one year then you will get it in the following year as well. 

Dazed_and_C0nfused

Nick_C said:

I don't think the banks etc are reporting data that they should not be.  HMRC are wrongly assuming that if you got interest from an account in one year then you will get it in the following year as well. 

That is the exact way a lot of income tax things work.  And has done for time immemorial!