Tax on savings income

Imelda

Sorry, I know there are a lot of questions about this!

For the first time in years I have income from savings (approx £12k - I have an offset mortgage and recent interest rate rises meant I could earn more in NS&I than by offsetting).  I know about the £10k limit and planned to request to do self assessment next tax year to pay the tax due for 24/25.

However, I have just received notification that my tax code has changed to take account of unpaid tax on interest of £563.

I am a basic rate tax payer and get the £1k savings allowance so I assume that means it has been reported that I have received £1,563 in interest in 2023/2024 (banks won't have submitted for the current tax year yet surely?).

I know at one point you could see online where HMRC got this figure from but I can't find it on my personal tax account.

I don't know how I have received this amount as all my money has been in the offset savings or the 1yr savings bond with NS&I (plus ISAs), previous tax years are up to date.  I certainly can't find it in my tax certificates for 23/24 - I assume it was that year?

Does anyone know if there is a secret, hidden place on the personal tax account where I can see which bank has sent this information? Or am I just going to have to contact HMRC?

Dazed_and_C0nfused

Imelda said:

Sorry, I know there are a lot of questions about this!

For the first time in years I have income from savings (approx £12k - I have an offset mortgage and recent interest rate rises meant I could earn more in NS&I than by offsetting).  I know about the £10k limit and planned to request to do self assessment next tax year to pay the tax due for 24/25.

However, I have just received notification that my tax code has changed to take account of unpaid tax on interest of £563.

I am a basic rate tax payer and get the £1k savings allowance so I assume that means it has been reported that I have received £1,563 in interest in 2023/2024 (banks won't have submitted for the current tax year yet surely?).

I know at one point you could see online where HMRC got this figure from but I can't find it on my personal tax account.

I don't know how I have received this amount as all my money has been in the offset savings or the 1yr savings bond with NS&I (plus ISAs), previous tax years are up to date.  I certainly can't find it in my tax certificates for 23/24 - I assume it was that year?

Does anyone know if there is a secret, hidden place on the personal tax account where I can see which bank has sent this information? Or am I just going to have to contact HMRC?

You cannot see that no.

Can you clarify what the £563 entry in your tax code you refer to is described as?

It's not clear if this is unpaid tax or the interest deduction needed in your tax code for the current tax year.

If you delve deep enough into your tax account you can sometimes see the total amount HMRC have based your tax code on, which might well be £1,563 (using the 2023-24 information as an estimate).  But that isn't clear yet.

Dazed_and_C0nfused

The interest information appears via a link called View detailed Income Tax estimate.

Imelda

Thanks - it says I have untaxed interest on savings and investments worth £563.

My tax code has been reduced by that amount and so I assume that is the amount of interest I have received over and above the £1k limit and therefore I owe 20% of it as tax.  

I only used three banks then and so it should be straightforward - I have asked them to send me tax certificates for every account I had with them in 23/24 as none of the ones I have collectively show that amount of interest.

It would be so much easier if HMRC shared the return they get from the banks!

Dazed_and_C0nfused

Imelda said:

Thanks - it says I have untaxed interest on savings and investments worth £563.

My tax code has been reduced by that amount and so I assume that is the amount of interest I have received over and above the £1k limit and therefore I owe 20% of it as tax.  

I only used three banks then and so it should be straightforward - I have asked them to send me tax certificates for every account I had with them in 23/24 as none of the ones I have collectively show that amount of interest.

It would be so much easier if HMRC shared the return they get from the banks!

So that deduction is only trying to collect extra tax towards what you will need to pay for 2024-25.

You will get a separate calculation for 2023-24 in due course showing the tax owed for that year.  Quite possibly ~£115.  

If you are now paying extra for 2024-25 the tax figure on your P60 will be more and you will see the benefit of that when you file your Self Assessment return for 2024-25

Imelda

Ah ok, this happened before and I ended up getting a demand in March 2022 to pay for the 20/21 tax year and then virtually the same amount in a rebate that November.
I guess it will all work itself out in the end - I hate owing tax.

Will I be asked to pay on account for next year when I do my SA return?

I will have over £10k again in 25/26 tax year so will need to do SA then as well but in the future when it goes back down to a "normal" level am I best reporting to HMRC what interest I think I will receive so they can deduct earlier in the tax year or just leave the banks to report it? Otherwise will they anticipate I will have £10k again and adjust my tax code?

badmemory

I had to speak to HMRC about something and they gave me the account numbers & the amount of interest on each account.  My discrepancy was caused by the NS&I being the only one of the banks I use that reported the interest correctly.  That is if it is a fixed term account (over one year) with no access to funds then the interest only becomes taxable at the end of the term