Personal Savings Tax Allowance

AlfieMacsen

Like many I have received more than £1000 in interest for 23/4 tax year. However HMRC are saying to me  that Banks & Building societies take the £1000 off the amount before submitting it to them. So they will tax the whole amount submitted to them. This seems unlikely since I have several accounts in different institutions. Each would not know how much of the £1000 to take off.

HMRC say take this up with the Banks & Building societies. I have, they deny any such procedure.

Any one else have this situation?

surreysaver

AlfieMacsen said:

Like many I have received more than £1000 in interest for 23/4 tax year. However HMRC are saying to me  that Banks & Building societies take the £1000 off the amount before submitting it to them. So they will tax the whole amount submitted to them. This seems unlikely since I have several accounts in different institutions. Each would not know how much of the £1000 to take off.

HMRC say take this up with the Banks & Building societies. I have, they deny any such procedure.

Any one else have this situation?

The banks and building societies tell HMRC how much interest they have paid you. HMRC then work out how much tax you owe, and adjust your tax code accordingly.
Like you say, individual organisations aren't going to know what other organisations are paying you, and they're also not going to know what your tax situation is either, as the Personal Savings Allowance is dependent upon what your total income is.

I wouldn't pay too much attention to what staff tell you about stuff they're not trained on or what they don't understand.

slinger2

Providers do not take £1,000 off, It's HMRC that take £1,000 off after they add up all the numbers, assuming you're a basic rate taxpayer and get that allowance. 

AlfieMacsen

Agreed,

but the "staff" giving this information are the HMRC. There comes a point after to 5 minutes of advice on how not to speak to them waiting in the queue to be heard, listening to answers of questions you didn't ask , trying to get them to see sense.......

Hoenir

Not clear how the situation has arisen. The £1.000 allowance being set in the system. 

Dazed_and_C0nfused

AlfieMacsen said:

Like many I have received more than £1000 in interest for 23/4 tax year. However HMRC are saying to me  that Banks & Building societies take the £1000 off the amount before submitting it to them. So they will tax the whole amount submitted to them. This seems unlikely since I have several accounts in different institutions. Each would not know how much of the £1000 to take off.

HMRC say take this up with the Banks & Building societies. I have, they deny any such procedure.

Any one else have this situation?

The banks are correct.

Their job is to report the taxable interest.  Not trying to work out the tax position.

If they did that you could have 10 accounts with 10 different banks, each earning £1,000 and HMRC would not get told anything.  Utter nonsense.

eskbanker

AlfieMacsen said:

Agreed,

but the "staff" giving this information are the HMRC. There comes a point after to 5 minutes of advice on how not to speak to them waiting in the queue to be heard, listening to answers of questions you didn't ask , trying to get them to see sense.......

What's the actual question you wanted to ask, and to what extent is the answer not provided online?  It always seems odd that people spend hours waiting to speak to HMRC on the phone when the definitive and reliable answer to a question is usually readily available within the published guides, hence HMRC's observation that about two thirds of their calls aren't really necessary....

Bigwheels1111

AlfieMacsen said:

Agreed,

but the "staff" giving this information are the HMRC. There comes a point after to 5 minutes of advice on how not to speak to them waiting in the queue to be heard, listening to answers of questions you didn't ask , trying to get them to see sense.......

Pay peanuts, Get Monkeys. Welcome to HMRC.

Two options.

One let the idiots deal with it, they will adjust your tax code and you just hope it's right.

Two, Sign up for self assessment and file a return. Not needed.

Do you know how much interest you got in 2023/2024 down to the penny ?

If so you can work out your bill its very easy.

DO you pay 20% tax or 40%.

You got £2000 interest - Personal savings allowance of £1000 leaves £1000 to be taxed.

20% tax = £200.

If you are taxed at 40%.

You got £2000 interest - Personal savings allowance of £500 leaves £1500 to be taxed.

40% tax = £600.

If you earn less than £12,570 no tax would be owed.

I have to file as get over 10K interest.

20 Minute job.

AlfieMacsen

There appears to be no disagreement about how much interest I received just how the tax is calculated.  "On line" does not answer this, only shows what is the correct way. Wish I had done SA anyhow.

surreysaver

AlfieMacsen said:

There appears to be no disagreement about how much interest I received just how the tax is calculated.  "On line" does not answer this, only shows what is the correct way. Wish I had done SA anyhow.

Here is the answer online

https://www.gov.uk/apply-tax-free-interest-on-savings

eskbanker

AlfieMacsen said:

There appears to be no disagreement about how much interest I received just how the tax is calculated.  "On line" does not answer this, only shows what is the correct way. Wish I had done SA anyhow.

What's the basis of your belief that you've been taxed incorrectly?