Notice of tax coding - starting rate for savings

pjmendip

Just been speaking to HMRC regarding an error on my wifes notice of tax coding. The notice did not include the Starting Rate for Savings allowance of £5K against her savings / investment interest. She is entitled to it, has received it in previous years and there have been no major changes to her circumstances.

After much debate and a discussion with a supervisor, the HMRC rep agreed with us that it should be there and would produce an amended coding notice including it.

What was slightly worrying was that the initial response was that my wife was not entitled to the allowance, despite the fact that she meets all the criteria set out on the Government web site and secondly,  once they agreed that the allowance should be there (following the discussion with the supervisor), they had no idea why the system had excluded it in the first place !

I just thought I'd enquire if others had found similar issues with the latest tax coding notices and also to give a "heads up" to folks who might want to check that the allowance has been included, if they are entitled to it.

At points during our discussion with HMRC it did go through my mind that the Government had sneakily removed the allowance at the last budget statement and kept it quiet. Fortunately that was not the case.

eskbanker

Are you saying that the issued tax coding would have resulted in tax being collected erroneously from her non-savings income via PAYE?  Roughly what are the figures involved for each income stream and what had they set the code to?

Nomunnofun1

eskbanker said:

Are you saying that the issued tax coding would have resulted in tax being collected erroneously from her non-savings income via PAYE?  Roughly what are the figures involved for each income stream and what had they set the code to?

Indeed - a tax coding is only applied to earnings subject to PAYE. I’m not sure of the point being made. 

DRS1

Note 2 on a Tax Code Notice says any untaxed interest included in the tax code "takes into account any Starter Savings Rate or Personal Savings Allowance you are entitled to."  Presumably the OP is making the point that in their case the Code did not do this.

Nomunnofun1

DRS1 said:

Note 2 on a Tax Code Notice says any untaxed interest included in the tax code "takes into account any Starter Savings Rate or Personal Savings Allowance you are entitled to."  Presumably the OP is making the point that in their case the Code did not do this.

Good point.