Estimated Savings Interest for Current Tax Year

MsSED

I received a shock when HMRC changed my tax code recently, saying I owe them almost £1000 in estimated interest on my savings for the current tax year and this means that I have to pay it over a three month period which will drastically reduce my income between January and March.  I had not realised they could do this because in previous years I did self-assessments and paid a lump sum in arrears.  Last year, HMRC told me that I don't need to do self-assessments any more.  In October 2025 I received a tax demand for 2024-25, which was correct and I paid it.  However, the above-mentioned tax code change relates to their estimated calculations for 2025-26, which I realise will be based on my savings interest for the previous tax year. I am sure I will earn less interest this year, therefore HMRC is getting money upfront, and I probably won't receive a refund until later in 2026. Also, I won't be earning savings interest on any of that £1,000.  Am I alone in thinking this is unfair?

Bigwheels1111

Contact them.
They lowered my code by 7k.
After a call it was back to 11.3k.
They had mistakes on my record.

Albermarle

It is not unfair, because HMRC have no choice but to base their calculations on last years interest, without any other info to go on. 
You can change your estimated interest that you will receive this year on your online personal tax account, which should help the situation.

mebu60

When you were on self assessment and paid a lump sum in arrears did you not also make payments on account? Which is very similar to the current scenario you describe. 

You can ask them to change the estimates but be very careful. If you make them lower than the actuals turn out to be there will be an interest penalty applied retrospectively. 

There was a thread recently about how to get back on SA (if you would prefer) if HMRC declined your request. It seemed to boil down to telling HMRC you were planning to contribute £10k to your SIPP in the tax year (presumably assuming you are allowed to do that much, I'm limited to £2880). Then you decide not to make the contribution when you are back on SA. 

Fatferds12

I had my tax code changed to be a lot more so contacted them via chat.  I told them what I estimated my actual interest would be and they updated my tax code immediately to the correct amount.  The next day I received an email confirming my new tax code.  It's definitely worth contacting them to get it changed to what it should be.