HMRC Tax Code changes are on their way

n15h

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.

It is a table and shows the name of the institution and the last 4 digits of the account number so you can locate it easily. It will also show you the numbers they have recorded and their status, which is either "actual" or "estimate". You can can then go and check your own records, ideally the annual interest statements most institutions provide and cross check the data or you have to go through statements. 

You may find that some challenger banks, mainly the app only ones do not report to HMRC. You also may encounter incorrect data or even duplicate submissions. Both, duplicates and incorrect data, was on mine and OH this and last year and both times to our disadvantage. 

Once you have done this and unless everything is correct, call them again and tell them that some info may not be right and you can go through with them line by line and they can adjust it. Once done, ask for an updated P800 to be send to you. 

I am not subject to self assessment but made the request and check against my own numbers a routine. I don't trust HMRC. 

 Thanks for this. Will contact HMRC to get this for my records as I've just received my tax code notice which has a large sum for untaxed interest. My basic calculations suggest i would need at least 170K in savings earning 4% to get the amount of untaxed interest they calculated - it would be a dream for me to have that much in savings but the reality is that its substantially less [over 50% less].

Yorkie1

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.

If the figure is currently wrong (e.g. £100 instead of £300), do you use that link to input the missing £200, or would you input the full correct figure, i.e. £300?

RG2015

Yorkie1 said:

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.

If the figure is currently wrong (e.g. £100 instead of £300), do you use that link to input the missing £200, or would you input the full correct figure, i.e. £300?

There are only three options. Incorrect, missing or ended.

As far as I can see, you have to input the correct total untaxed interest from banks and building societies for the year.

Dazed_and_C0nfused

RG2015 said:

Yorkie1 said:

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.

If the figure is currently wrong (e.g. £100 instead of £300), do you use that link to input the missing £200, or would you input the full correct figure, i.e. £300?

There are only three options. Incorrect, missing or ended.

As far as I can see, you have to input the correct total untaxed interest from banks and building societies for the year.

Agree, "add extra" isn't an option, you would provide the correct figure for the year you are updating.

Curious to know if anyone has actually done this yet and what the outcome was? 

I don't understand how this actually works given that if you call you have to provide details for each individual bank account 🤔

Ocelot

I phoned them up and they told me to send a letter to:

Paye self-assessment

HMRC

bx9 1as

to explain about interest arising in a different tax year, as the 'adviser' didn't understand.

Interestingly, the same thing occurred to someone else here:

https://www.thisismoney.co.uk/money/saving/article-14342041/HMRC-sent-tax-demand-fixed-savings-account-wont-paid-matures.html

An HMRC spokesperson replies: Tax is charged on interest arising in the tax year. 

If interest is credited to a bondholder's account but the bondholder can't access the funds until maturity, then the interest arises, and is taxable, at the maturity of the bond.

RG2015

Ocelot said:

I phoned them up and they told me to send a letter to:

Paye self-assessment

HMRC

bx9 1as

to explain about interest arising in a different tax year, as the 'adviser' didn't understand.

Interestingly, the same thing occurred to someone else here:

https://www.thisismoney.co.uk/money/saving/article-14342041/HMRC-sent-tax-demand-fixed-savings-account-wont-paid-matures.html

An HMRC spokesperson replies: Tax is charged on interest arising in the tax year. 

If interest is credited to a bondholder's account but the bondholder can't access the funds until maturity, then the interest arises, and is taxable, at the maturity of the bond.

It appears that This is Money (The Daily Mail) doesn’t check their articles if they can print the following.

Banks and building societies notify HMRC of interest received, but a saver should only be required to submit a tax return if the total interest (excluding interest from their Isa) was over £1,000 in a given tax year. 

The figure is actually £10,000

GalacticaActual

Just received my tax code in the post for the new tax year, starting 6 April 2025.

Untaxed Interest - this is an estimate of the interest you will receive during the year. Doesn’t specify which tax year but they’ve put in a figure of £4,600.
Tax you owe (earlier year) - I still owe £111 from an earlier tax year, apparently (must be 2024/25 tax year as per K tax code issued 1st Jan 2025). Adjustment made to tax code for 2025/26 to accommodate owed tax.

Tax code will be 733L from 6 April 2025.

eskbanker

GalacticaActual said:

Just received my tax code in the post for the new tax year, starting 6 April 2025.

Untaxed Interest - this is an estimate of the interest you will receive during the year. Doesn’t specify which tax year but they’ve put in a figure of £4,600.
Tax you owe (earlier year) - I still owe £111 from an earlier tax year, apparently (must be 2024/25 tax year as per K tax code issued 1st Jan 2025). Adjustment made to tax code for 2025/26 to accommodate owed tax.

Tax code will be 733L from 6 April 2025.

The £4,600 untaxed interest will presumably relate to 2025/26 if that's the year the code refers to.

The tax owed from an earlier tax year must be 2023/24, as they can't have calculated tax owed for 2024/25 yet, even if they've used an estimate of interest to adjust your 2024/25 coding (a separate issue from what you're seeing in this coding notice) - it's normal for collection of underpaid tax to skip a year, i.e. any deficit from 2023/24 will be collected in 2025/26, not 2024/25.

GalacticaActual

eskbanker said:

GalacticaActual said:

Just received my tax code in the post for the new tax year, starting 6 April 2025.

Untaxed Interest - this is an estimate of the interest you will receive during the year. Doesn’t specify which tax year but they’ve put in a figure of £4,600.
Tax you owe (earlier year) - I still owe £111 from an earlier tax year, apparently (must be 2024/25 tax year as per K tax code issued 1st Jan 2025). Adjustment made to tax code for 2025/26 to accommodate owed tax.

Tax code will be 733L from 6 April 2025.

The £4,600 untaxed interest will presumably relate to 2025/26 if that's the year the code refers to.

The tax owed from an earlier tax year must be 2023/24, as they can't have calculated tax owed for 2024/25 yet, even if they've used an estimate of interest to adjust your 2024/25 coding (a separate issue from what you're seeing in this coding notice) - it's normal for collection of underpaid tax to skip a year, i.e. any deficit from 2023/24 will be collected in 2025/26, not 2024/25.

Thanks for the explanation. I think my tax code will have lots of adjustments going forward until they receive actual figures for the appropriate tax years from the respective financial organisations.

I’ve been using more of my ISA allowance this tax year to alleviate any taxable interest liability.

RG2015

GalacticaActual said:

eskbanker said:

GalacticaActual said:

Just received my tax code in the post for the new tax year, starting 6 April 2025.

Untaxed Interest - this is an estimate of the interest you will receive during the year. Doesn’t specify which tax year but they’ve put in a figure of £4,600.
Tax you owe (earlier year) - I still owe £111 from an earlier tax year, apparently (must be 2024/25 tax year as per K tax code issued 1st Jan 2025). Adjustment made to tax code for 2025/26 to accommodate owed tax.

Tax code will be 733L from 6 April 2025.

The £4,600 untaxed interest will presumably relate to 2025/26 if that's the year the code refers to.

The tax owed from an earlier tax year must be 2023/24, as they can't have calculated tax owed for 2024/25 yet, even if they've used an estimate of interest to adjust your 2024/25 coding (a separate issue from what you're seeing in this coding notice) - it's normal for collection of underpaid tax to skip a year, i.e. any deficit from 2023/24 will be collected in 2025/26, not 2024/25.

Thanks for the explanation. I think my tax code will have lots of adjustments going forward until they receive actual figures for the appropriate tax years from the respective financial organisations.

I’ve been using more of my ISA allowance this tax year to alleviate any taxable interest liability.

If you expect your untaxed interest to differ significantly from their estimates, you can give them your estimates. They will then amend your tax code.

I have done this online for the current tax year and the following tax year. If you have access to your personal tax account online, you can do this here. Click on PAYE, then check current year and then on add missing investment income. This may sound misleading, but here you can enter your estimates for this year and next year.