HMRC calculation of tax owed on savings interest

Jazzking

HMRC notified me that I owe tax on my savings interest as is exceeds £1000 in 24/25 and is more than their estimate of £913. However I suspect (without going back and checking all my statements) that the amount that has been reported to them is quite a bit lower than what I have actually been paid across my range of current, savings and regular savings accounts (excluding ISA)
I do not complete a self-assessment and am a basic rate taxpayer.

My question is, must I dig out the old statements to check and correct this now, or is it the bank's obligation to report to correct figures?  I'm happy to pay the tax if owed, and even better if it is deferred until the next year when everything catches up but don't want to be fined for not informing them of interest received when the arrangement is that HMRC receives the information from the financial institutions directly?

Ayr_Rage

If you have not been advised that you need to file a SA return then leave it be, however if you know you subsequently meet the criteria to file then the onus is on you to do so.

You should always keep accurate records of all income received including interest and dividends.

eskbanker

Jazzking said:

My question is, must I dig out the old statements to check and correct this now, or is it the bank's obligation to report to correct figures?  I'm happy to pay the tax if owed, and even better if it is deferred until the next year when everything catches up but don't want to be fined for not informing them of interest received when the arrangement is that HMRC receives the information from the financial institutions directly?

It's the taxpayer's responsibility to ensure that the right amount of tax is paid, not HMRC's or the bank's, so if you're aware of an underpayment then it's up to you to get that corrected.

Audaxer

Jazzking said:

HMRC notified me that I owe tax on my savings interest as is exceeds £1000 in 24/25 and is more than their estimate of £913. However I suspect (without going back and checking all my statements) that the amount that has been reported to them is quite a bit lower than what I have actually been paid across my range of current, savings and regular savings accounts (excluding ISA)
I do not complete a self-assessment and am a basic rate taxpayer.

My question is, must I dig out the old statements to check and correct this now, or is it the bank's obligation to report to correct figures?  I'm happy to pay the tax if owed, and even better if it is deferred until the next year when everything catches up but don't want to be fined for not informing them of interest received when the arrangement is that HMRC receives the information from the financial institutions directly?

I thought it was just up to the banks to report all interest to HMRC. The following text is from Gov.uk website:

"If you’re employed or get a pension

HMRC will change your tax code so you pay the tax automatically. To decide your tax code, HMRC will estimate how much interest you’ll get in the current year by looking at how much you got the previous year.

You will get a tax calculation letter if you have a tax overpayment or underpayment. The letters are sent between June and March of the following tax year."

If you think the figure that HMRC has given for your 24/25 tax year interest is incorrect, I would check all your bank statements and if different I would advise HMRC.

IOWJJBTM2025

If you are happy with the amount to pay just pay it. If you want something different then I would guess they will want you to start completing self assessment every year which is a bind.

My mother is 82 years old and her pensions including the state pension add up to be slightly over the £12570 threshold.
Because they cannot take tax off the state pension at source she has to submit self assessment. Her other pensions pay tax automatically.
I called HMRC to complain and they told me that if she cannot complete the self assessment herself she should employ an accountant to do it for her. Last year she had to pay £80 tax.
I obviously do the self assessment for her and paid the tax.
She had a scammer phoning her up a few weeks ago claiming to be from HMRC stating that she had to call them back by the end of the day to discuss payment. I told her to ignore but she was very worried that debt collectors would be knocking on her door.

maman

IOWJJBTM2025 said:

If you are happy with the amount to pay just pay it. If you want something different then I would guess they will want you to start completing self assessment every year which is a bind.

My mother is 82 years old and her pensions including the state pension add up to be slightly over the £12570 threshold.
Because they cannot take tax off the state pension at source she has to submit self assessment. Her other pensions pay tax automatically.
I called HMRC to complain and they told me that if she cannot complete the self assessment herself she should employ an accountant to do it for her. Last year she had to pay £80 tax.
I obviously do the self assessment for her and paid the tax.
She had a scammer phoning her up a few weeks ago claiming to be from HMRC stating that she had to call them back by the end of the day to discuss payment. I told her to ignore but she was very worried that debt collectors would be knocking on her door.

My occupational pension is taxed through PAYE. My savings income is added in to my total income and my tax code changed to reflect this. I don't have to complete a self assessment form. 

Albermarle

IOWJJBTM2025 said:

If you are happy with the amount to pay just pay it. If you want something different then I would guess they will want you to start completing self assessment every year which is a bind.

My mother is 82 years old and her pensions including the state pension add up to be slightly over the £12570 threshold.
Because they cannot take tax off the state pension at source she has to submit self assessment. Her other pensions pay tax automatically.
I called HMRC to complain and they told me that if she cannot complete the self assessment herself she should employ an accountant to do it for her. Last year she had to pay £80 tax.
I obviously do the self assessment for her and paid the tax.
She had a scammer phoning her up a few weeks ago claiming to be from HMRC stating that she had to call them back by the end of the day to discuss payment. I told her to ignore but she was very worried that debt collectors would be knocking on her door.

It should not be necessary for your Mother to fill in a self assessment return .
A 'simple assessment' should be sufficient.

Simple assessment | Low Incomes Tax Reform Group

Jazzking

Thanks everyone. 

I've checked again and I don't meet the criteria to file a SA. 
I always thought it was for HMRC to adjust the tax code to ensure the right amount of tax is paid in these circumstances but I *may* look through my statements and/or I may see if HMRC can give me a breakdown so I can at least see where their number comes from so I know which accounts have been included and therefore which may obviously have been missed. 

eskbanker

Jazzking said:

I always thought it was for HMRC to adjust the tax code to ensure the right amount of tax is paid in these circumstances...

Tax codes can only be changed by HMRC, but they're only ever a blunt instrument to attempt to collect known and/or estimated tax liabilities via PAYE during the tax year, and the definitive calculation can only ever be made after the event.

Ayr_Rage

HMRC do adjust codes based on the interest information they receive from banks etc

Unfortunately those amounts are not visible to the taxpayer at all in online accounts.

Eco_Miser

IOWJJBTM2025 said:

If you are happy with the amount to pay just pay it. If you want something different then I would guess they will want you to start completing self assessment every year which is a bind.

My mother is 82 years old and her pensions including the state pension add up to be slightly over the £12570 threshold.
Because they cannot take tax off the state pension at source she has to submit self assessment. Her other pensions pay tax automatically.
I called HMRC to complain and they told me that if she cannot complete the self assessment herself she should employ an accountant to do it for her. Last year she had to pay £80 tax.
I obviously do the self assessment for her and paid the tax.
She had a scammer phoning her up a few weeks ago claiming to be from HMRC stating that she had to call them back by the end of the day to discuss payment. I told her to ignore but she was very worried that debt collectors would be knocking on her door.

My state and occupational pensions have added to over £12570 since 2023/4. All the tax is deducted from the occupational pension. No assessment, just a notice of coding. I have savings interest less than the residual Starter Rate, so no tax on that.

Is it possible that the total tax due is greater than her other pension(s)?