Additional £5000 Personal Savings Allowance

Little_jelly1

I understand the rules for how low income earners may have additional tax free savings allowance and so my only query is if someone has never completed a self assessment tax form and does not earn a "job income" (only a small private pension) will they become liable to have to complete a self assessment tax form? If no such form is required I presume Banks/Building Societies inform HMRC of the interest earned which satisfies HMRC that the maximum allowed in interest from savings has not been exceeded ?
Thanks

Middle_of_the_Road

Little_jelly1 said:

I understand the rules for how low income earners may have additional tax free savings allowance and so my only query is if someone has never completed a self assessment tax form and does not earn a "job income" (only a small private pension) will they become liable to have to complete a self assessment tax form? If no such form is required I presume Banks/Building Societies inform HMRC of the interest earned which satisfies HMRC that the maximum allowed in interest from savings has not been exceeded ?
Thanks

You would only need to self assess if your interest from savings exceeded £10k, in your circumstances.

Bigwheels1111

Add all your earnings, pension and interest, is it below £18,570.
£12,570 is your tax free allowance and can be made up of earnings, pension or interest.
£  5,000 this is your starter savings allowance, so from interest and is tax free.
£  1,000 Personal Savings Allowance.
£18,570 possible tax free.

I get 4k carers allowance and 10k interest.
So £14,000 tax free.

If you earned £14k and got 4.5k interest you would not pay tax on the interest but on the £1,430 over the £12,570.
£286 taxable. 

The starter savings rate reduces by the amount you go into it with earnings.

As for self assessment for over 10k interest, I have to file a return as breach the limit.
I called HMRC last year and told them I will get over 10k interest. Guy said I need to file and 3 days later I got a letter to confirm this.
Saved me waiting all year and then rush to file before January 31st.
It takes longer to register than to file a return.

It’s even easier this year, I filed on the 6th April and took 10 minutes.
You complete, do I need to file return form.
It asks a few questions and then limits what you need to fill out.
For you it would limit it to Pension and untaxed interest.

Less then10k interest no need to file.
But I would register to make sure their figures are correct.
Not all banks report interest or give the correct amounts.
You can request a copy of the information.