As a PAYE taxpayer, how to complete a BBSI letter from HMRC?

Somerset_Alan

I've had a letter from HMRC stating that I have untaxed interest for the 2024-2025 tax year, and instructing me to provide "information [for] each bank and building society account".

I have had at least* 14 cash accounts in the year; their form allows space for just four, and says to continue on additional sheets.  The form requires me to sign a declaration that I've given details of all bank and building society accounts.

There is no information about whether I can exclude ISAs, and other accounts that are not interest-bearing (*I have cash held in share dealing accounts, for example).  

All I can find on the topic at gov.uk is guidance for the institutions making their annual returns.

So - is there definitive guidance somewhere, or do I just have to take a punt that I won't be guilty of hiding information if I exclude cash ISAs?

poseidon1

Somerset_Alan said:

I've had a letter from HMRC stating that I have untaxed interest for the 2024-2025 tax year, and instructing me to provide "information [for] each bank and building society account".

I have had at least* 14 cash accounts in the year; their form allows space for just four, and says to continue on additional sheets.  The form requires me to sign a declaration that I've given details of all bank and building society accounts.

There is no information about whether I can exclude ISAs, and other accounts that are not interest-bearing (*I have cash held in share dealing accounts, for example).  

All I can find on the topic at gov.uk is guidance for the institutions making their annual returns.

So - is there definitive guidance somewhere, or do I just have to take a punt that I won't be guilty of hiding information if I exclude cash ISAs?

Nothing within any ISA  ( dividends, Interest, capital gains ) is disclosed to HMRC. 

As for cash on sharedealing accounts, the platforms I use ( HL, II, trading 212) all pay credit interest on uninvested cash. They all provide a year end summary (for tax purposes) of all income to be disclosed to HMRC, so be very careful not to overlook interest earned on dealing accounts.

DRS1

Odd, when I get a letter like that it goes on to tell me I owe £x of tax.

If you are worried about excluding ISAs then just add a statement to the effect that you "have excluded any interest earned on an ISA in the tax year".

If you have accounts which pay no interest in the year but paid interest in the previous year it may be an idea to include them with a zero entry (and perhaps an explanation like closed in 23/4).  I suggest that because HMRC will have that account on their list for 23/4 and will just assume you got the same interest in 24/5 unless you tell them otherwise.

And like @poseidon1 says I get interest on cash balances on share dealing accounts.  So double check those just in case.  But you only need to declare the interest on a GIA not an ISA or SIPP.

Somerset_Alan

Thank you, poseidon1 and DRS1.  I'll leave off the ISAs and a note to that effect.  And I will double check re. cash held in dealing accounts but I had some in Jarvis's low-cost account X-O and as far as I can tell that didn't credit any interest on cash.

I do have several non-ISA B Soc accounts which paid no interest in the year, due to various combinations of account opening dates, closing dates, and interest payment schedule.  I will definitely include them.

It seems they suspect that there's been inadequate data supplied to them by the B Socs for the past year.  After sending this in, would it be worthwhile for me to ask for the details they've used in previous years?

youngretired

I would personally contact HMRC first and request them to send a BBSI to yourself for 24/25.
That way you can see what figures they are using and account details. As if they are carried over from 23/24 as estimates you can then provide them with the closure dates or the correct interest if different. Plus unless the name match exactly and account numbers they may duplicate amounts as they have done this in the past i.e. Kent Reliance is One Savings Bank, Marcus is Goldman Sachs, all HSBC group is as HSBC not individual like 1st Direct, Lloyd's group are all Lloyd's and not Halifax, Bank of Scotland etc etc.
So I always get the BBSI sent and then correct them. You can request the BBSI online via chat or phone and you can also give them the correct information on the phone, just be prepared you may have to wait to get through. 

Isthisforreal99

Are you within Self-Assessment and if so is this in response to a return you have filed?

DRS1

I have to say that my letter usually arrives much later in the year so I suspect HMRC may not have all the figures from the banks or building societies for 24/5 yet (or may not have sorted them out).  I do wonder why they are asking for the information now.

I know they are nagging people (well me) to file their self assessment early but we have till next January to file for 24/5.

Hoenir

DRS1 said:

Odd, when I get a letter like that it goes on to tell me I owe £x of tax.

Perhaps the HMRC are fishing........  

Bigwheels1111

Does sound odd to me. Never had a letter like that.
I do get you need to file a self assessment return.

I earn over 10k in interest so need to file self assessment.
So I keep very accurate records.
There comes a problem with interest, re when it’s accessible.
For eg, 3 year fixed rate, interest paid at maturity.
Or a reg saver that pays interest every 3 months.
What to declare.
Some banks report interest even though it’s not accessible, causing an issue. Gov wants its tax.
This is why I opted for annual payout. Some don’t report, Raisin and H&L from memory.
With reg saver I decided to declare some this year and the rest next year.
I file on the 6th of April, takes under 20 minutes.
In 3 year they have never asked for statements.

mybestattempt

I think it best not to try to second guess why the information is being requested by HMRC.

If you're asked by HMRC to provide details of all bank and building society accounts, rather than omit any, provide details of all but ensure that you clearly identify which of those accounts are ISAs.

Hopefully, that will avoid a further request for ISA details if they were required (for whatever reason).

Mee

Thanks for the advice here.
I've had other things on my mind of late and I only checked my tax code for 2025/26 yesterday to find it has been  reduced due to apparently having earned 3K in untaxed interest. I earn on average £6 or 7K a year now on a zero hours/casual contract (PAYE) so I somewhat bemused by it all. Anyway will ask for a BBSI as suggested.