Tax on savings interest

kuepper

For the first time Untaxed Interest has appeared on my tax code notice to the tune of £600. Note 3 on the notice states it's an estimate of the interest I'll receive during the year based on the previous year. How would they have worked this out and how can I check the figures accurately when I get interest at different times of the year in different accounts?

SiliconChip

All interest paid is reported to HMRC by banks, buildig societies, etc. By now they should have a reasonably accurate total for the 2023/4 tax year which you can see in your personal tax account, but you'll have to call HMRC if you want to get a breakdown so that you can reconcile the figures with your own records - I suggest that you do it as I discovered one bank's interest was missing from the HMRC total, and I'm still trying to find out whether it's an error at the bank or at HMRC.

TheSpectator

It's little wonder HMRC can't handle the volume of calls when people are phoning to ask for information that they are too lazy to retain themselves.

Fair enough ask for details if you can't reconcile the figures to your own records but from recent posts on MSE there are a few people who have no clue how much interest they have been paid.

FrugaiMacDugal

You should get an interest statement from your various savings accounts after 5th April each year.

Might be a month or two, some are quicker than others, or check online,

Easy to check figures then.

Goldenyears

In my own 2023/24 HMRC revised code I noticed that the taxable interest according to HMRC was exactly what I calculated from a total of 3 accounts.  This told me that the institutions were reporting fixed term interest annually, as we all thought they were, even if we had no access to annual compounded interest.  

Second it told me that NS&I were reporting  my fixed term account as zero interest (or not reporting) to HMRC, as NS&I state in their Ts&Cs, interest only reported/added at maturity.

molerat

My estimated interest this year is the same as the actual for last year, it is about £50 over my estimate but still under £1K so of no real concern.  It is your responsibility to ensure your tax affairs are in order so you should be keeping records and making your own estimate if you want the correct tax to be deducted.  I have a spreadsheet each year, this year with 10 accounts paying a mixture of monthly and annual interest, which I update regularly so I know how things are and I could offload some instant access money into MrsM's accounts if necessary.  My spreadsheet for next year is already up and I know that I will have to pay some tax due to a large 18mth fix maturing which will use up most of my £1K. It ain't difficult if you can be bothered, if you can't then HMRC will take a stab but if it don't work out you have only got yourself to blame.

kassy64

TheSpectator said:

It's little wonder HMRC can't handle the volume of calls when people are phoning to ask for information that they are too lazy to retain themselves.

Fair enough ask for details if you can't reconcile the figures to your own records but from recent posts on MSE there are a few people who have no clue how much interest they have been paid.

The problem is, as was my situation HMRC estimate your savings interest based on the previous years figures and change you code accordingly. Hence, why I contacted them recently to reset my tax code back to 1257 as I will not be getting anywhere near the interest on my savings this year as I had the previous year (paid off mortgage, several; large purchases and moved a lot in to ISA's). That's why people are calling and sometimes it has nothing to do with 'laziness' as mentioned, why should HMRC take tax in advance that isn't even going to become liable. I for one don't want to overpay income tax and have to wait 18 months for it to be refunded.

molerat

kassy64 said:

TheSpectator said:

It's little wonder HMRC can't handle the volume of calls when people are phoning to ask for information that they are too lazy to retain themselves.

Fair enough ask for details if you can't reconcile the figures to your own records but from recent posts on MSE there are a few people who have no clue how much interest they have been paid.

The problem is, as was my situation HMRC estimate your savings interest based on the previous years figures and change you code accordingly. Hence, why I contacted them recently to reset my tax code back to 1257 as I will not be getting anywhere near the interest on my savings this year as I had the previous year (paid off mortgage, several; large purchases and moved a lot in to ISA's). That's why people are calling and sometimes it has nothing to do with 'laziness' as mentioned, why should HMRC take tax in advance that isn't even going to become liable. I for one don't want to overpay income tax and have to wait 18 months for it to be refunded.

Why call ?  There are other ways, simply log in to your on line tax account and change the estimate.

eskbanker

kassy64 said:

TheSpectator said:

It's little wonder HMRC can't handle the volume of calls when people are phoning to ask for information that they are too lazy to retain themselves.

Fair enough ask for details if you can't reconcile the figures to your own records but from recent posts on MSE there are a few people who have no clue how much interest they have been paid.

The problem is, as was my situation HMRC estimate your savings interest based on the previous years figures and change you code accordingly. Hence, why I contacted them recently to reset my tax code back to 1257 as I will not be getting anywhere near the interest on my savings this year as I had the previous year (paid off mortgage, several; large purchases and moved a lot in to ISA's). That's why people are calling and sometimes it has nothing to do with 'laziness' as mentioned, why should HMRC take tax in advance that isn't even going to become liable. I for one don't want to overpay income tax and have to wait 18 months for it to be refunded.

That's a different scenario - you were calling because you needed to change something (albeit it could have been done online), but the laziness comment was directed at those phoning to ask for information that they should already have had.

kassy64

molerat said:

kassy64 said:

TheSpectator said:

It's little wonder HMRC can't handle the volume of calls when people are phoning to ask for information that they are too lazy to retain themselves.

Fair enough ask for details if you can't reconcile the figures to your own records but from recent posts on MSE there are a few people who have no clue how much interest they have been paid.

The problem is, as was my situation HMRC estimate your savings interest based on the previous years figures and change you code accordingly. Hence, why I contacted them recently to reset my tax code back to 1257 as I will not be getting anywhere near the interest on my savings this year as I had the previous year (paid off mortgage, several; large purchases and moved a lot in to ISA's). That's why people are calling and sometimes it has nothing to do with 'laziness' as mentioned, why should HMRC take tax in advance that isn't even going to become liable. I for one don't want to overpay income tax and have to wait 18 months for it to be refunded.

Why call ?  There are other ways, simply log in to your on line tax account and change the estimate.

Yep agree, I did go that way but the estimate for the request to be actioned was showing as 6-8 weeks so to make the phone call was the correct decision. I would have been paying extra tax at end of this month and probably next if I hadn't called.

molerat

kassy64 said:

molerat said:

kassy64 said:

TheSpectator said:

It's little wonder HMRC can't handle the volume of calls when people are phoning to ask for information that they are too lazy to retain themselves.

Fair enough ask for details if you can't reconcile the figures to your own records but from recent posts on MSE there are a few people who have no clue how much interest they have been paid.

The problem is, as was my situation HMRC estimate your savings interest based on the previous years figures and change you code accordingly. Hence, why I contacted them recently to reset my tax code back to 1257 as I will not be getting anywhere near the interest on my savings this year as I had the previous year (paid off mortgage, several; large purchases and moved a lot in to ISA's). That's why people are calling and sometimes it has nothing to do with 'laziness' as mentioned, why should HMRC take tax in advance that isn't even going to become liable. I for one don't want to overpay income tax and have to wait 18 months for it to be refunded.

Why call ?  There are other ways, simply log in to your on line tax account and change the estimate.

Yep agree, I did go that way but the estimate for the request to be actioned was showing as 6-8 weeks so to make the phone call was the correct decision. I would have been paying extra tax at end of this month and probably next if I hadn't called.

Every time I have done an adjustment it is actioned within 48 hours.