HMRC over estimate of untaxed interest

wmb194

https://forums.moneysavingexpert.com/discussion/comment/81952902#Comment_81952902

Outside tax wrappers it's all subject to tax; you enter £4,000. Allowances are applied in the tax calculation.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/81952902#Comment_81952902

You enter whay you receive ,£4000

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81952902#Comment_81952902

I think "free of tax" is a bit misleading given all of the £4,000 will be taxed, albeit some at a 0% rate, and forms part of your adjusted net income. So even if no tax is payable on the first £1,000 it can still increase your overall tax liability.

missymouse

I went on the site today and I am up to date with my untaxed interest from 24/25 which was deducted from December onwards but will my tax allowance and code now go back to normal?

I have a horrible feeling something like £7000 flashed up but then I couldn’t get back to see this again

I am calculating my untaxed income and hope to be more organised this year so I don’t get any shocks

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81955056#Comment_81955056

Your 2026/27 tax coding will be based on their assumptions about your income streams for this year, so you can view these in your online tax account and correct if necessary.

missymouse

yes thanks

I’ve noticed that although I have paid back the taxed interest from last year my take home pay has not gone back to what it was in November and my tax code has changed.

is this because they assume I have the same amount of savings and is the only way to contact them by ‘phone

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81986540#Comment_81986540

Yes, their assumption is that income from savings will be the same from year to year, until they hear otherwise either from the financial institutions (via annual BBSI returns) or the taxpayer (via self assessment or ad hoc contact).

As above, you can adjust the expected income via your online tax account if you don't want to phone.