HMRC Tax Code changes are on their way

Sunshine_and_Roses

VNX said:

Sunshine_and_Roses said:

Sunshine_and_Roses said:

Hope someone can advise.  I have received a new tax code for 2025 which I questioned with HMRC, they said they base it on a guesstimate of previous year's interest earnings.  We went through my accounts, most of which were fixed savings then balance moved to various ISA on maturity.  My tax code was then adjusted back to 1257.

I then received a tax calculation for tax year 2023/2024 saying I had £7080 in untaxed interest, and owed HMRC £326.  As most of my savings are now in Premium Bonds or ISA, with old fixed rate accounts closed, how can I check the actual amount of interest earned that year?  I did start to 'ladder save' on some 1, 2 and 3 year fixed accounts and unsure how they calculate interest with those. 

£7000 of interest would have meant I had £150,000 in ordinary savings accounts at rates between 4% and 5%, which I know I did not have.

Is there an easy way of doing this or is it a trawl through all closed accounts?  Thanks.

I have spoken to HMRC who were really helpful.  I wrongly thought that the fixed 'ladder savings' I did over three years would have the interest calculated on maturity, rather than each tax year.  I opened a number of these at the end of 2022 when the interest rate had increased.  Lesson learnt.

** Edit - after checking the account details that HMRC gave me, it appears that Santander have included my Mum's accounts that I have POA for.  I have spoken to Santander who admitted their error and will readjust figures for HMRC.  That should now take me back under the tax threshold.

I know this argument has been had a million times but on fixed bonds tax on interest is meant to be in the tax year the interest arises I.e when you can access it, is this not the case?

HMRC could not answer the question with a straight answer, just said they so on the figures that the banks send them.  Awaiting these figures in the post do I can check. 

akh43

First time I have had to look in detail at this. Not received a new code, but on checking my tax account online today the estimated savings interest has jumped up from £585 a few days ago to £1,069 today for 6 Apr 24 to 5 Apr 25. My estimated income has also changed, but this time from from £19.972 (est tax of £1,327) to £15,367, which looks right except over by £5 (est tax £559) which on checking the MSE tax calculator looks correct. 

I am not due to pay any tax on my savings due to my income this year, but going forward I get my state pension from April and so my income will increase to approx £23k so will go to the £1k PSA, so I would really like to check this is correct now or am I overthinking it?

How do I work out how they have reached the estimated figure of £1,069, ie what dates to and from?  Once I know how they collate I can check my statements, but need to know the dates first.  I have lots of savings accounts, some closed, but most of my money is now in ISAs.  Is the estimated savings interest likely to change before the new tax year?

Can you see the savings interest from previous tax years on your tax account as I looked and could not see it, only on this years.

Thanks

Dazed_and_C0nfused

akh43 said:

First time I have had to look in detail at this. Not received a new code, but on checking my tax account online today the estimated savings interest has jumped up from £585 a few days ago to £1,069 today for 6 Apr 24 to 5 Apr 25. My estimated income has also changed, but this time from from £19.972 (est tax of £1,327) to £15,367, which looks right except over by £5 (est tax £559) which on checking the MSE tax calculator looks correct. 

I am not due to pay any tax on my savings due to my income this year, but going forward I get my state pension from April and so my income will increase to approx £23k so will go to the £1k PSA, so I would really like to check this is correct now or am I overthinking it?

How do I work out how they have reached the estimated figure of £1,069, ie what dates to and from?  Once I know how they collate I can check my statements, but need to know the dates first.  I have lots of savings accounts, some closed, but most of my money is now in ISAs.  Is the estimated savings interest likely to change before the new tax year?

Can you see the savings interest from previous tax years on your tax account as I looked and could not see it, only on this years.

Thanks

Is the £1,069 the untaxed interest deduction on your 2024-25 tax code or from somewhere else in your online account?

Is the £15,367 the estimate of your income from an employment or pension?  Or the total income including untaxed interest?

akh43

Dazed_and_C0nfused said:

akh43 said:

First time I have had to look in detail at this. Not received a new code, but on checking my tax account online today the estimated savings interest has jumped up from £585 a few days ago to £1,069 today for 6 Apr 24 to 5 Apr 25. My estimated income has also changed, but this time from from £19.972 (est tax of £1,327) to £15,367, which looks right except over by £5 (est tax £559) which on checking the MSE tax calculator looks correct. 

I am not due to pay any tax on my savings due to my income this year, but going forward I get my state pension from April and so my income will increase to approx £23k so will go to the £1k PSA, so I would really like to check this is correct now or am I overthinking it?

How do I work out how they have reached the estimated figure of £1,069, ie what dates to and from?  Once I know how they collate I can check my statements, but need to know the dates first.  I have lots of savings accounts, some closed, but most of my money is now in ISAs.  Is the estimated savings interest likely to change before the new tax year?

Can you see the savings interest from previous tax years on your tax account as I looked and could not see it, only on this years.

Thanks

Is the £1,069 the untaxed interest deduction on your 2024-25 tax code or from somewhere else in your online account?

Is the £15,367 the estimate of your income from an employment or pension?  Or the total income including untaxed interest?

The £1,069 is untaxed interest on my 2024-25 code on the total income tax estimate page. 

On the PAYE income tax estimate page this has been added to the £15,367 which is my estimated pension income from my last employment.  There is a new figure of the 2 added together of £16,436, but £13,639 is income I do not pay tax on and £2,797 is the income I am taxed on which is estimated at £559.

Dazed_and_C0nfused

akh43 said:

Dazed_and_C0nfused said:

akh43 said:

First time I have had to look in detail at this. Not received a new code, but on checking my tax account online today the estimated savings interest has jumped up from £585 a few days ago to £1,069 today for 6 Apr 24 to 5 Apr 25. My estimated income has also changed, but this time from from £19.972 (est tax of £1,327) to £15,367, which looks right except over by £5 (est tax £559) which on checking the MSE tax calculator looks correct. 

I am not due to pay any tax on my savings due to my income this year, but going forward I get my state pension from April and so my income will increase to approx £23k so will go to the £1k PSA, so I would really like to check this is correct now or am I overthinking it?

How do I work out how they have reached the estimated figure of £1,069, ie what dates to and from?  Once I know how they collate I can check my statements, but need to know the dates first.  I have lots of savings accounts, some closed, but most of my money is now in ISAs.  Is the estimated savings interest likely to change before the new tax year?

Can you see the savings interest from previous tax years on your tax account as I looked and could not see it, only on this years.

Thanks

Is the £1,069 the untaxed interest deduction on your 2024-25 tax code or from somewhere else in your online account?

Is the £15,367 the estimate of your income from an employment or pension?  Or the total income including untaxed interest?

The £1,069 is untaxed interest on my 2024-25 code on the total income tax estimate page. 

On the PAYE income tax estimate page this has been added to the £15,367 which is my estimated pension income from my last employment.  There is a new figure of the 2 added together of £16,436, but £13,639 is income I do not pay tax on and £2,797 is the income I am taxed on which is estimated at £559.

The £1,069 is probably based on the actual information received for 2023-24.  And HMRC are currently using that as the estimate for 2024-25.

If you want the breakdown of how much was reported by different banks and building societies then you just need to call HMRC and ask for the list and they will send the details out to you.

In 2024-25 all of the (estimated) interest is being taxed at 0% as you can benefit from the savings starter rate band but you are correct, that will not be available to you in 2025-26 if you have earnings/pension income of £23k.  So just the first £1,000 will be taxable at 0% (from the savings nil rate band (aka Personal Savings Allowance)).

drob4

Does anyone have any experience of HL Active Savings sending interest info to HMRC. I’ve always assumed they didn’t, but notice the following on their faq page:

>>Banks and other financial institutions (e.g. HL) report all interest to HM Revenue & Customs (HMRC) at the end of each tax year. 

Hargreaves Lansdown (HL) Active Savings is a deposit aggregator. This means interest earned by clients can be reported by different financial institutions, which may cause duplicate reporting to HMRC. HL will do the following:

1. HL will provide a tax certificate to clients at the end of every tax year showing the overall interest earned. This will be a combination of all interest earned including fixed term interest paid to the cash hub, easy access and limited access interest. Clients can refer to their monthly statements to review the interest earned.

2. HL will provide to HMRC an itemised breakdown of interest earned by clients.<<

The above seems to suggest they now DO send interest figures to HMRC.

Only asking because my new tax code (based on last year’s interest) takes into account all my interest from last year apart from that earned with HL Active Savings. So it appears that they haven’t informed HMRC.

I’m aware there are various threads on Raisin and HL reporting interest. Just wondered if anything had changed.

RG2015

Dazed_and_C0nfused said:

qbadger said:

InvesterJones said:

pecunianonolet said:

Can anyone tell me where to find this in the app to adjust interest estimates? I can't seem to find it and have the same issue and now have to deal with an emergency tax code and quite a bit less net going in from salary because of that resulting in one reg saver I can't keep funding further. I tried to call and a friendly but clueless lady told me it can't be adjusted after I wasted an hour waiting....

The constant tax code tinkering is an annoyance and I don't know why they can't just go, gather the facts due later in the year, send me a bill and I pay my due instead of all this crystal ball shenanigans. 

Try the website rather than the app. (gov.uk/personal-tax-account)

I'm really struggling to find this so would appreciate some more pointers, please. 

PAYE -> Check current year -> ?

I can see how to update the estimated employment income here, but which link(s) do I follow to update the estimated interest income?

There should be an (slightly oddly named) link called "Add missing investment income".

Which actually lets you notify HMRC of, amongst other things, untaxed interest that is missing, has changed or has ended.

I did this in 2023 and had to add the interest for every bank and building society account separately. I have just gone in today and all they ask for is the total for all untaxed interest from banks and building societies.

I was able to do this for the current tax year and next tax year.


EDIT: I have just checked back to my 2023 submission and seen that it was just one figure. The form where I had to enter the interest for every bank and building society account must have been the claim I made for a tax rebate.

RG2015

wiseonesomeofthetime said:

pecunianonolet said:

Hoenir said:

pecunianonolet said:

Ask HMRC to send you the BBSI (Bank and Building Society Interest) records they are holding on you. You can request different tax years. You should get some time later a letter with this data.

No wonder the HMRC is bogged down and has a back log. Its not a free administration service. 

Calculate the figures yourself and submit them. Job done. 

Let the HMRC query the figures and deal with it as the neccessity arises. 

I have the figures down to the penny in my spreadsheet. When HMRC starts to be actually useful and would operate efficiently it wouldn't be necessary anymore. 

Same.

And when they matched this time around, I did ask the guy on the phone about getting a printout of my record, however, when he said that they had to be done manually, and bearing in mind there were 47 savings accounts that bore interest that tax year, I told him not to bother as I would rather his time be spent dealing with the next caller, for which he was grateful

I asked for this a few years back for the current and following year. The guy on the phone said all he had to do was push a button and it printed automatically. The only manual bit was putting the 10 sheets of paper into an envelope. It had two years itemised by each bank and building society account

This was not the actual final figures for the completed year but the amount being carried forward to subsequent years. However it was all based on the last actual figures received for the previous tax year. This I inferred by comparing with my records for the previous year.

drob4

RG2015 said:I

Dazed_and_C0nfused said:

qbadger said:

InvesterJones said:

pecunianonolet said:

Can anyone tell me where to find this in the app to adjust interest estimates? I can't seem to find it and have the same issue and now have to deal with an emergency tax code and quite a bit less net going in from salary because of that resulting in one reg saver I can't keep funding further. I tried to call and a friendly but clueless lady told me it can't be adjusted after I wasted an hour waiting....

The constant tax code tinkering is an annoyance and I don't know why they can't just go, gather the facts due later in the year, send me a bill and I pay my due instead of all this crystal ball shenanigans. 

Try the website rather than the app. (gov.uk/personal-tax-account)

I'm really struggling to find this so would appreciate some more pointers, please. 

PAYE -> Check current year -> ?

I can see how to update the estimated employment income here, but which link(s) do I follow to update the estimated interest income?

There should be an (slightly oddly named) link called "Add missing investment income".

Which actually lets you notify HMRC of, amongst other things, untaxed interest that is missing, has changed or has ended.

I did this in 2023 and had to add the interest for every bank and building society account separately. I have just gone in today and all they ask for is the total for all untaxed interest from banks and building societies.

I was able to do this for the current tax year and next tax year.

When inputting the total for all untaxed interest, did you ignore the PSA and enter the actual total without any deductions? Want to make sure I do this right first time.

RG2015

drob4 said:

RG2015 said:I

Dazed_and_C0nfused said:

qbadger said:

InvesterJones said:

pecunianonolet said:

Can anyone tell me where to find this in the app to adjust interest estimates? I can't seem to find it and have the same issue and now have to deal with an emergency tax code and quite a bit less net going in from salary because of that resulting in one reg saver I can't keep funding further. I tried to call and a friendly but clueless lady told me it can't be adjusted after I wasted an hour waiting....

The constant tax code tinkering is an annoyance and I don't know why they can't just go, gather the facts due later in the year, send me a bill and I pay my due instead of all this crystal ball shenanigans. 

Try the website rather than the app. (gov.uk/personal-tax-account)

I'm really struggling to find this so would appreciate some more pointers, please. 

PAYE -> Check current year -> ?

I can see how to update the estimated employment income here, but which link(s) do I follow to update the estimated interest income?

There should be an (slightly oddly named) link called "Add missing investment income".

Which actually lets you notify HMRC of, amongst other things, untaxed interest that is missing, has changed or has ended.

I did this in 2023 and had to add the interest for every bank and building society account separately. I have just gone in today and all they ask for is the total for all untaxed interest from banks and building societies.

I was able to do this for the current tax year and next tax year.

When inputting the total for all untaxed interest, did you ignore the PSA and enter the actual total without any deductions? Want to make sure I do this right first time.

I entered the total non-ISA interest received.