Self Assessment questions for my wife

arsenalboy

My wifes only income is state pension and interest on savings. All savings are in my wifes name as I pay 40% tax. Savings interest is way over 10K and we registered my wife for self assessment.

I have a question. Whilst we are happy with the tax to be paid by 31 jan 26 for 24/25, the form also calculates 50% of assumed tax on interest for 25/26. Now as this income is not a salary received in equal amounts throughout the year, isnt my wife effectively being forced to pay tax on interest not yet received as quite a bit of it will be received in the final quarter? 

Dazed_and_C0nfused

arsenalboy said:

My wifes only income is state pension and interest on savings. All savings are in my wifes name as I pay 40% tax. Savings interest is way over 10K and we registered my wife for self assessment.

I have a question. Whilst we are happy with the tax to be paid by 31 jan 26 for 24/25, the form also calculates 50% of assumed tax on interest for 25/26. Now as this income is not a salary received in equal amounts throughout the year, isnt my wife effectively being forced to pay tax on interest not yet received as quite a bit of it will be received in the final quarter? 

31 January 2026 is roughly three quarters of the way through the 2025-26 tax year.

If she had a PAYE pension she could well have been paying extra tax towards the tax on the interest from the end of April 2025.  Nine months earlier.

She seems in a fortunate position to me really.

And Self Assessment is based on the total liability, there will not be any POA required in respect of a particular type of income.

arsenalboy

Dazed_and_C0nfused said:

arsenalboy said:

My wifes only income is state pension and interest on savings. All savings are in my wifes name as I pay 40% tax. Savings interest is way over 10K and we registered my wife for self assessment.

I have a question. Whilst we are happy with the tax to be paid by 31 jan 26 for 24/25, the form also calculates 50% of assumed tax on interest for 25/26. Now as this income is not a salary received in equal amounts throughout the year, isnt my wife effectively being forced to pay tax on interest not yet received as quite a bit of it will be received in the final quarter? 

31 January 2026 is roughly three quarters of the way through the 2025-26 tax year.

If she had a PAYE pension she could well have been paying extra tax towards the tax on the interest from the end of April 2025.  Nine months earlier.

She seems in a fortunate position to me really.

And Self Assessment is based on the total liability, there will not be any POA required in respect of a particular type of income.

Thanks, that is very logical the way you lay it out. Can I ask a supplementary please?

The 50% assumed for 25/26 is based on 24/25 actual, but 2 things have happened that will reduce 25/26 liability. The first is falling interest rates  and the second is movement into ISAs. Is my wife allowed to "challenge" the 50% calculation?

Dazed_and_C0nfused

arsenalboy said:

Dazed_and_C0nfused said:

arsenalboy said:

My wifes only income is state pension and interest on savings. All savings are in my wifes name as I pay 40% tax. Savings interest is way over 10K and we registered my wife for self assessment.

I have a question. Whilst we are happy with the tax to be paid by 31 jan 26 for 24/25, the form also calculates 50% of assumed tax on interest for 25/26. Now as this income is not a salary received in equal amounts throughout the year, isnt my wife effectively being forced to pay tax on interest not yet received as quite a bit of it will be received in the final quarter? 

31 January 2026 is roughly three quarters of the way through the 2025-26 tax year.

If she had a PAYE pension she could well have been paying extra tax towards the tax on the interest from the end of April 2025.  Nine months earlier.

She seems in a fortunate position to me really.

And Self Assessment is based on the total liability, there will not be any POA required in respect of a particular type of income.

Thanks, that is very logical the way you lay it out. Can I ask a supplementary please?

The 50% assumed for 25/26 is based on 24/25 actual, but 2 things have happened that will reduce 25/26 liability. The first is falling interest rates  and the second is movement into ISAs. Is my wife allowed to "challenge" the 50% calculation?

No, there is nothing she can do to "challenge" the POA amounts, they are a matter of fact.

She can though make a claim to reduce the POA if she believes the 2025-26 liability will be less.  Just to be clear this is the total liability completely irrespective of why it arises. 

So if her interest was expected to result in £0 extra tax in 2025-26  but she had a new source of (taxable) income which meant she had some tax to pay on that in 2025-26 then that has to be considered, you wouldn't just reduce the POA to £0 as it is they overall position that counts, not individual sources of income.

NB.  Each POA has to be within 1 pence of each other.  For example £600.00 each or £600.00 first POA and £600.01 second POA.  You cannot reduce to say £200 first POA and £1000 second POA.