Reporting Savings interest to HMRC

Dazed_and_C0nfused

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

According to gov.uk penalties.

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

booneruk

Dazed_and_C0nfused said:

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

According to gov.uk penalties.

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

Interesting. I assume to decide on what the penalty would be, they'd need to know the interest I've earned (I can't imagine they'd be issuing a fine for 1p overshoot).

 I'll keep an eye on what's reported next year and if it's not in the ballpark I expect I'll faff about updating them.

fistfulofsteel

If your income is low enough (under £17,570) there's an additional 0% tax allowance of up to £5,000.

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

Pat38493

booneruk said:

Dazed_and_C0nfused said:

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

According to gov.uk penalties.

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

Interesting. I assume to decide on what the penalty would be, they'd need to know the interest I've earned (I can't imagine they'd be issuing a fine for 1p overshoot).

 I'll keep an eye on what's reported next year and if it's not in the ballpark I expect I'll faff about updating them.

It's a bit of a weird area this as I highly doubt that HMRC wants millions of people to suddenly start calling them to report savings interest when for the most part they already have the information.  Therefore I would be surprised if they issued penalties to people who only earned a few hundred pounds of interest here and there and assumed that it would be reported automatically, especially if the institution that the information is held with states on their web site that they inform HMRC about it.

In the meantime, I found a link on Hargreaves Lansdown Active Savings portal that states that they do indeed report the information to HMRC.  In fact they warn you that it's possible for double counting to occur if the underlying bank also reports the same information!  I have sent them a secure message to confirm this.

https://www.hl.co.uk/savings/savings-account/savings-faqs

If they confirm it, I will probably just wait till January to see whether HMRC automatically triggers anything as I don't want to spend 2 hours on the phone for no reason.

For tax year 25/26 it will probably be a bit different as she now has cash sitting in a T212 Investing GIA account, and I am pretty sure that this is not reported automatically.

masonic

Pat38493 said:

booneruk said:

Dazed_and_C0nfused said:

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

According to gov.uk penalties.

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

Interesting. I assume to decide on what the penalty would be, they'd need to know the interest I've earned (I can't imagine they'd be issuing a fine for 1p overshoot).

 I'll keep an eye on what's reported next year and if it's not in the ballpark I expect I'll faff about updating them.

It's a bit of a weird area this as I highly doubt that HMRC wants millions of people to suddenly start calling them to report savings interest when for the most part they already have the information.  Therefore I would be surprised if they issued penalties to people who only earned a few hundred pounds of interest here and there and assumed that it would be reported automatically, especially if the institution that the information is held with states on their web site that they inform HMRC about it.

No, they don't want people to contact them unless it's over £10,000 or HMRC makes an error. The people who do so voluntarily just want some extra peace of mind.

Pat38493 said:

In the meantime, I found a link on Hargreaves Lansdown Active Savings portal that states that they do indeed report the information to HMRC.  In fact they warn you that it's possible for double counting to occur if the underlying bank also reports the same information!  I have sent them a secure message to confirm this.

https://www.hl.co.uk/savings/savings-account/savings-faqs

If they confirm it, I will probably just wait till January to see whether HMRC automatically triggers anything as I don't want to spend 2 hours on the phone for no reason.

For tax year 25/26 it will probably be a bit different as she now has cash sitting in a T212 Investing GIA account, and I am pretty sure that this is not reported automatically.

I don't really understand this. When you report the interest, you report all of it and state that it is a complete record of the interest you have received.

There was some debate recently about investment accounts and I think the conclusion was that it won't be reported automatically. So there is a high likelihood your figure from HMRC will be wrong for any tax year you have income from unwrapped investment accounts.

Why don't you do what I did when I wasn't completing tax returns: write them a letter with a full table of interest received and invite them to do their calculation using that?

Pat38493

masonic said:

Pat38493 said:

booneruk said:

Dazed_and_C0nfused said:

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

According to gov.uk penalties.

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

Interesting. I assume to decide on what the penalty would be, they'd need to know the interest I've earned (I can't imagine they'd be issuing a fine for 1p overshoot).

 I'll keep an eye on what's reported next year and if it's not in the ballpark I expect I'll faff about updating them.

It's a bit of a weird area this as I highly doubt that HMRC wants millions of people to suddenly start calling them to report savings interest when for the most part they already have the information.  Therefore I would be surprised if they issued penalties to people who only earned a few hundred pounds of interest here and there and assumed that it would be reported automatically, especially if the institution that the information is held with states on their web site that they inform HMRC about it.

No, they don't want people to contact them unless it's over £10,000 or HMRC makes an error. The people who do so voluntarily just want some extra peace of mind.

Pat38493 said:

In the meantime, I found a link on Hargreaves Lansdown Active Savings portal that states that they do indeed report the information to HMRC.  In fact they warn you that it's possible for double counting to occur if the underlying bank also reports the same information!  I have sent them a secure message to confirm this.

https://www.hl.co.uk/savings/savings-account/savings-faqs

If they confirm it, I will probably just wait till January to see whether HMRC automatically triggers anything as I don't want to spend 2 hours on the phone for no reason.

For tax year 25/26 it will probably be a bit different as she now has cash sitting in a T212 Investing GIA account, and I am pretty sure that this is not reported automatically.

I don't really understand this. When you report the interest, you report all of it and state that it is a complete record of the interest you have received.

There was some debate recently about investment accounts and I think the conclusion was that it won't be reported automatically. So there is a high likelihood your figure from HMRC will be wrong for any tax year you have income from unwrapped investment accounts.

Why don't you do what I did when I wasn't completing tax returns: write them a letter with a full table of interest received and invite them to do their calculation using that?

Hl Active savings is a platform where you can select from a list of different banks that they partner with and an account will opened automatically based on the information from HL, so in theory it means you can move money to the best accounts more easily.

To quote from HL:

Banks and other financial institutions (e.g. HL) report all interest to HM Revenue & Customs (HMRC) at the end of each tax year.

Hargreaves Lansdown (HL) Active Savings is a deposit aggregator. This means interest earned by clients can be reported by different financial institutions, which may cause duplicate reporting to HMRC. HL will do the following:

1. HL will provide a tax certificate to clients at the end of every tax year showing the overall interest earned. This will be a combination of all interest earned including fixed term interest paid to the cash hub, easy access and limited access interest. Clients can refer to their monthly statements to review the interest earned.

2. HL will provide to HMRC an itemised breakdown of interest earned by clients.

Within Active Savings the only bank that is able to report client interest directly to HMRC is Coventry Building Society as they hold individual client data, all other banks can only provide a total amount paid to HLSL as a ‘non-individual’ as they do not hold individual client data.

Why do my records differ from what HMRC is reporting?

HMRC are aware there is potential for duplication of interest being reported and advise on their website:

HMRC use information provided to them directly by banks, building societies and financial institutions about any savings interest income you receive. They may use this to send you a bill at the end of the tax year and/or to amend your tax code. You should check the figure very carefully, as the amount can be incorrect. For example, the figures for joint accounts may not be reported correctly (especially if the account is not held in equal shares), estimated amounts from prior years may be rolled forward, or figures can even be duplicated. If you are unsure, you should contact HMRC to ask them for a breakdown.

Our Partner Banks are also required to submit an annual return call a ‘Bank & Building Society Return’. For most of our banks as they run under our ‘pooled’ model they submit a total amount of interest paid to HLSL within the tax year as a ‘non individual’. This is because they do not hold the underlying client details to report on. Coventry are different to this as they operate under our ‘direct’ model they do hold underlying client data so when submitting their report they can provide the client data (name, address, DOB) along with the interest amount paid to them. As both HLSL and Coventry report the interest with the client data this should not cause any duplications between the two reports with HMRC.

Note that HL does not seem to recommend that you contact HMRC unless you think something is wrong.  Obviously this information applies to the Active Savings platform - if you have a GIA I'm sure it's different.

masonic

Pat38493 said:

masonic said:

Pat38493 said:

booneruk said:

Dazed_and_C0nfused said:

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

According to gov.uk penalties.

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

Interesting. I assume to decide on what the penalty would be, they'd need to know the interest I've earned (I can't imagine they'd be issuing a fine for 1p overshoot).

 I'll keep an eye on what's reported next year and if it's not in the ballpark I expect I'll faff about updating them.

It's a bit of a weird area this as I highly doubt that HMRC wants millions of people to suddenly start calling them to report savings interest when for the most part they already have the information.  Therefore I would be surprised if they issued penalties to people who only earned a few hundred pounds of interest here and there and assumed that it would be reported automatically, especially if the institution that the information is held with states on their web site that they inform HMRC about it.

No, they don't want people to contact them unless it's over £10,000 or HMRC makes an error. The people who do so voluntarily just want some extra peace of mind.

Pat38493 said:

In the meantime, I found a link on Hargreaves Lansdown Active Savings portal that states that they do indeed report the information to HMRC.  In fact they warn you that it's possible for double counting to occur if the underlying bank also reports the same information!  I have sent them a secure message to confirm this.

https://www.hl.co.uk/savings/savings-account/savings-faqs

If they confirm it, I will probably just wait till January to see whether HMRC automatically triggers anything as I don't want to spend 2 hours on the phone for no reason.

For tax year 25/26 it will probably be a bit different as she now has cash sitting in a T212 Investing GIA account, and I am pretty sure that this is not reported automatically.

I don't really understand this. When you report the interest, you report all of it and state that it is a complete record of the interest you have received.

There was some debate recently about investment accounts and I think the conclusion was that it won't be reported automatically. So there is a high likelihood your figure from HMRC will be wrong for any tax year you have income from unwrapped investment accounts.

Why don't you do what I did when I wasn't completing tax returns: write them a letter with a full table of interest received and invite them to do their calculation using that?

Hl Active savings is a platform where you can select from a list of different banks that they partner with and an account will opened automatically based on the information from HL, so in theory it means you can move money to the best accounts more easily.

To quote from HL:

Banks and other financial institutions (e.g. HL) report all interest to HM Revenue & Customs (HMRC) at the end of each tax year.

Hargreaves Lansdown (HL) Active Savings is a deposit aggregator. This means interest earned by clients can be reported by different financial institutions, which may cause duplicate reporting to HMRC. HL will do the following:

1. HL will provide a tax certificate to clients at the end of every tax year showing the overall interest earned. This will be a combination of all interest earned including fixed term interest paid to the cash hub, easy access and limited access interest. Clients can refer to their monthly statements to review the interest earned.

2. HL will provide to HMRC an itemised breakdown of interest earned by clients.

Within Active Savings the only bank that is able to report client interest directly to HMRC is Coventry Building Society as they hold individual client data, all other banks can only provide a total amount paid to HLSL as a ‘non-individual’ as they do not hold individual client data.

Why do my records differ from what HMRC is reporting?

HMRC are aware there is potential for duplication of interest being reported and advise on their website:

HMRC use information provided to them directly by banks, building societies and financial institutions about any savings interest income you receive. They may use this to send you a bill at the end of the tax year and/or to amend your tax code. You should check the figure very carefully, as the amount can be incorrect. For example, the figures for joint accounts may not be reported correctly (especially if the account is not held in equal shares), estimated amounts from prior years may be rolled forward, or figures can even be duplicated. If you are unsure, you should contact HMRC to ask them for a breakdown.

Our Partner Banks are also required to submit an annual return call a ‘Bank & Building Society Return’. For most of our banks as they run under our ‘pooled’ model they submit a total amount of interest paid to HLSL within the tax year as a ‘non individual’. This is because they do not hold the underlying client details to report on. Coventry are different to this as they operate under our ‘direct’ model they do hold underlying client data so when submitting their report they can provide the client data (name, address, DOB) along with the interest amount paid to them. As both HLSL and Coventry report the interest with the client data this should not cause any duplications between the two reports with HMRC.

Note that HL does not seem to recommend that you contact HMRC unless you think something is wrong.  Obviously this information applies to the Active Savings platform - if you have a GIA I'm sure it's different.

Wow, what a mess that is. So both HL and the underlying savings provider have a tendency to report exactly the same interest independently of each other? Meanwhile over at Raisin, there have been reports that neither Raisin nor the savings provider report interest. Gotta love aggregators!

subjecttocontract

It makes me feel fortunate that I keep detailed records of interest payments received and submit a Self Assessment Tax Return to HMRC every year.

Ocelot

From experience if you phone up to tell them they tell you to write in. When you write in they completely ignore your letter.

Altior

booneruk said:

In my case, I'm going to be earning more than my PSA in interest this tax year,  in the region of £50-£100 or so. I'm not intending to go out of my way to tell HMRC about this small overshoot - if various bodies should be auto reporting and they don't, I don't really consider that my problem.

What's the worst that can happen?! [it will not be pushing me anywhere near the next tax band btw]

Unless there is some kind of rather unlikely thorough inspection of your own personal tax affairs (all income and outgoings), the only way HMRC can know about your interest income is via the various institutions reporting it. You'll end up paying the correct amount of tax for all interest income reported by said institutions.

Theoretically there are possible penalties for not paying the right tax on interest earnings, but practically there aren't. Obviously they aren't going to interrogate the multiple accounts of millions of people to identify only a potential modest amount of unpaid tax on interest that financial platforms are mandated to report, anyway. It is however in the interest (pardon the pun), of any individuals accumulating a very large amount of taxable interest to ensure that they've dotted i's and crossed t's on their affairs. I'd say the types of individuals that have multiple sources of high income, and not on paye.