Tax code change due to savings income - pay off now or just leave it?

wiseonesomeofthetime

In my opinion, offering us the facility to pay what we owe in untaxed interest should be the default. Not messing with our tax codes.

Most people set their budgets to their known income, and do not expect that income to go down year on year.

Altering tax code, for PAYE anyway, could then be the backstop.

eskbanker

wiseonesomeofthetime said:

In my opinion, offering us the facility to pay what we owe in untaxed interest should be the default. Not messing with our tax codes.

Most people set their budgets to their known income, and do not expect that income to go down year on year.

Altering tax code, for PAYE anyway, could then be the backstop.

If you have the money to pay anyway, you can just draw down those funds monthly to make up for any unexpected PAYE deductions, which has the effect of deferring payment and earning a bit of interest in the mean time?

wiseonesomeofthetime

eskbanker said:

wiseonesomeofthetime said:

In my opinion, offering us the facility to pay what we owe in untaxed interest should be the default. Not messing with our tax codes.

Most people set their budgets to their known income, and do not expect that income to go down year on year.

Altering tax code, for PAYE anyway, could then be the backstop.

If you have the money to pay anyway, you can just draw down those funds monthly to make up for any unexpected PAYE deductions, which has the effect of deferring payment and earning a bit of interest in the mean time?

You most certainly can, but it's still untidy in my opinion. Rather deal with it cleanly, than mess for a few pence extra interest.

Remember, your tax code is also adjusted to recover tax on interest you haven't received yet, based on estimated predictions.

eskbanker

wiseonesomeofthetime said:

eskbanker said:

wiseonesomeofthetime said:

In my opinion, offering us the facility to pay what we owe in untaxed interest should be the default. Not messing with our tax codes.

Most people set their budgets to their known income, and do not expect that income to go down year on year.

Altering tax code, for PAYE anyway, could then be the backstop.

If you have the money to pay anyway, you can just draw down those funds monthly to make up for any unexpected PAYE deductions, which has the effect of deferring payment and earning a bit of interest in the mean time?

You most certainly can, but it's still untidy in my opinion. Rather deal with it cleanly, than mess for a few pence extra interest.

Remember, your tax code is also adjusted to recover tax on interest you haven't received yet, based on estimated predictions.

Sure, but you can update those predictions if you believe them to be inaccurate.  I think that's a separate issue anyway - I was comparing automated deductions (throughout all remaining months of the tax year) with your preferred mechanism of one-off settlement, which would be earlier in the year, so you're effectively proposing payment even further in advance (they're not going to accept retrospective collection once they're aware of the income stream)!