Tax code change mid-year

HornetUK88

I opened a new savings account that paid £78 interest in October (acct opened last week of Oct) and £278 in November.  Today I had an HMRC coding notice saying I have untaxed interest of £33.

I thought banks told HMRC interest at the end of the tax year?

Have they estimated the tax for the rest of the year or will they amend the code every month?

I presume they have included my £1k savings allowance as I'm a 20% taxpayer.

Thanks for any advice and help.

InvesterJones

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

Dazed_and_C0nfused

HornetUK88 said:

I opened a new savings account that paid £78 interest in October (acct opened last week of Oct) and £278 in November.  Today I had an HMRC coding notice saying I have untaxed interest of £33.

I thought banks told HMRC interest at the end of the tax year?

Have they estimated the tax for the rest of the year or will they amend the code every month?

I presume they have included my £1k savings allowance as I'm a 20% taxpayer.

Thanks for any advice and help.

It has nothing to do with interest you have received in this tax year.

If you are a basic rate taxpayer then yes, it's highly likely that the actual amount HMRC have used as an estimate of your total interest for this year is £1,033

HornetUK88

InvesterJones said:

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

I had no interest last year or for years before.  I only started a non ISA savings account in October this year.  That's why it's odd they've done this a 5 weeks after the first interest payment.

Dazed_and_C0nfused

HornetUK88 said:

InvesterJones said:

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

I had no interest last year or for years before.  I only started a non ISA savings account in October this year.  That's why it's odd they've done this a 5 weeks after the first interest payment.

You're saying you didn't receive any (taxable) interest at all in 2024/25?

Did you have an ISA with ZOPA by any chance?

InvesterJones

HornetUK88 said:

InvesterJones said:

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

I had no interest last year or for years before.  I only started a non ISA savings account in October this year.  That's why it's odd they've done this a 5 weeks after the first interest payment.

That's just co-incidence. Look at the text of the letter (on the back I think?) where they go through it and explain why it's there - that might clear up that it's a previous year.

HornetUK88

Dazed_and_C0nfused said:

HornetUK88 said:

InvesterJones said:

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

I had no interest last year or for years before.  I only started a non ISA savings account in October this year.  That's why it's odd they've done this a 5 weeks after the first interest payment.

You're saying you didn't receive any (taxable) interest at all in 2024/25?

Did you have an ISA with ZOPA by any chance?

None as all in an ISA.

HornetUK88

InvesterJones said:

HornetUK88 said:

InvesterJones said:

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

I had no interest last year or for years before.  I only started a non ISA savings account in October this year.  That's why it's odd they've done this a 5 weeks after the first interest payment.

That's just co-incidence. Look at the text of the letter (on the back I think?) where they go through it and explain why it's there - that might clear up that it's a previous year.

Just says taxable interest from savings this year £33.

HornetUK88

I have had no interest except ISA in previous 5 years and received these two amounts in Oct and Nov it can only be Nat West informing HMRC? I can't work out how else it has happened, they have lowered my code and it says I'll be paying £6 tax on the interest.  

Dazed_and_C0nfused

HornetUK88 said:

I have had no interest except ISA in previous 5 years and received these two amounts in Oct and Nov it can only be Nat West informing HMRC? I can't work out how else it has happened, they have lowered my code and it says I'll be paying £6 tax on the interest.  

I don't think there is a mechanism for banks to notify HMRC of interest during the year.

If you had an ISA with ZOPA that could be the problem as ZOPA have seemingly reported tax exempt ISA interest as taxable interest.

phlebas192

HornetUK88 said:

Dazed_and_C0nfused said:

HornetUK88 said:

InvesterJones said:

They can and do change tax code at any time, however I doubt the unpaid tax has anything to do with October's interest, it's more likely from last year.

I had no interest last year or for years before.  I only started a non ISA savings account in October this year.  That's why it's odd they've done this a 5 weeks after the first interest payment.

You're saying you didn't receive any (taxable) interest at all in 2024/25?

Did you have an ISA with ZOPA by any chance?

None as all in an ISA.

Are you absolutely sure you didn't receive any untaxed interest from any source? eg your bank current account might pay a small amount of interest on positive balances.