Declare interest above 10k if no tax is due...?

Ciprico

As title, my wife earned about 2k (salary/paye), and made about 12k gross in interest. No other i/c.

As she is well within the personal allowance / personal savings allowance, do we need to report the 12k interest. 

I read somewhere you only need to report interest in excess of 10k if tax is due....

It will be a bit of a faff to sign up for SA if not essential....

Can we just write a letter to HMRC explaining the above, I don't have first hand experience, but I hear it is very hard to contact HMRC ?

Could someone clarify

TIA

Dazed_and_C0nfused

Ciprico said:

As title, my wife earned about 2k (salary/paye), and made about 12k gross in interest. No other i/c.

As she is well within the personal allowance / personal savings allowance, do we need to report the 12k interest. 

I read somewhere you only need to report interest in excess of 10k if tax is due....

It will be a bit of a faff to sign up for SA if not essential....

Can we just write a letter to HMRC explaining the above, I don't have first hand experience, but I hear it is very hard to contact HMRC ?

Could someone clarify

TIA

The savings nil rate (aka Personal Savings Allowance) is of no use to her.

That can only be used once the Personal Allowance (£11,310 for her?) and any savings starter rate band has been used.  As she will be able to benefit from the full savings starter rate band she won't be able to use the savings nil rate band.

AIUI legally she doesn't need to do anything if no tax is payable.  But if HMRC choose to issue her with a tax return then she should just file one.  It will be quicker than arguing about it.

Bookworm225

depending on how hard you wish to google it, the principle is that until a tax return is physically submitted, HMRC remain unaware of whether tax is due or not.

Self Assessment tax returns: Who must send a tax return - GOV.UK
You may also need to send a tax return if you have any untaxed income, such as:

• money from renting out a property
• tips and commission
• income from savings, investments and dividends
• foreign income

What they are aware of, thanks to the requirement placed on banks etc to notify HMRC of interest, is that in their opinion in receipt of 10k + of intertest "you" should be on HMRC's radar as "most" people in receipt of such a large amount will have a tax liability that makes it worthwhile HMRC getting out of bed to investigate.

Confusion on savings interest – HMRC weighs in - Baines Jewitt Stockton on Tees Accountants

Ciprico

Dazed_and_C0nfused said:

Ciprico said:

As title, my wife earned about 2k (salary/paye), and made about 12k gross in interest. No other i/c.

As she is well within the personal allowance / personal savings allowance, do we need to report the 12k interest. 

I read somewhere you only need to report interest in excess of 10k if tax is due....

It will be a bit of a faff to sign up for SA if not essential....

Can we just write a letter to HMRC explaining the above, I don't have first hand experience, but I hear it is very hard to contact HMRC ?

Could someone clarify

TIA

The savings nil rate (aka Personal Savings Allowance) is of no use to her.

That can only be used once the Personal Allowance (£11,310 for her?) and any savings starter rate band has been used.  As she will be able to benefit from the full savings starter rate band she won't be able to use the savings nil rate band.

AIUI legally she doesn't need to do anything if no tax is payable.  But if HMRC choose to issue her with a tax return then she should just file one.  It will be quicker than arguing about it.

D&C

How do you get £11310 ?

Her personal allowance is £12,570.

But her joint I/c  of 14k would use up her personal allowance, and the 1k allowance so would start to use the secondary 5k allowance...¿

What am.i missing?

DRS1

I think he is just saying the £5k thing gets used before the £1k thing.

As for £11300 that was just assuming your wife may have given you part of her personal allowance - some couples do that if it saves the higher earner some tax.

Dazed_and_C0nfused

Ciprico said:

Dazed_and_C0nfused said:

Ciprico said:

As title, my wife earned about 2k (salary/paye), and made about 12k gross in interest. No other i/c.

As she is well within the personal allowance / personal savings allowance, do we need to report the 12k interest. 

I read somewhere you only need to report interest in excess of 10k if tax is due....

It will be a bit of a faff to sign up for SA if not essential....

Can we just write a letter to HMRC explaining the above, I don't have first hand experience, but I hear it is very hard to contact HMRC ?

Could someone clarify

TIA

The savings nil rate (aka Personal Savings Allowance) is of no use to her.

That can only be used once the Personal Allowance (£11,310 for her?) and any savings starter rate band has been used.  As she will be able to benefit from the full savings starter rate band she won't be able to use the savings nil rate band.

AIUI legally she doesn't need to do anything if no tax is payable.  But if HMRC choose to issue her with a tax return then she should just file one.  It will be quicker than arguing about it.

D&C

How do you get £11310 ?

Her personal allowance is £12,570.

But her joint I/c  of 14k would use up her personal allowance, and the 1k allowance so would start to use the secondary 5k allowance...¿

What am.i missing?

Personal Allowance of £11,310 would apply if she has applied for Marriage Allowance.

She cannot use the £1,000 savings nil rate band (PSA) as that comes last in the order of taxation, the Personal Allowance and savings starter rate band (where available) have to be used first.

Irrespective of what her Personal Allowance is you can forget about the £1,000, she simply doesn't have enough income to be able to benefit from that.

Bookworm225

Ciprico said:.

But her joint I/c  of 14k would use up her personal allowance, and the 1k allowance so would start to use the secondary 5k allowance...¿

What am.i missing?

you are missing the fact the starter rate for savings is not a (tax free) "allowance", it is a 0% tax band

so she has 14k gross income of which 14 -12,570 is taxed at 0%
it may seem semantics but it is an important technicality