Estimated Savings Interest for Current Tax Year

eskbanker

LoopySnooker said:

Albermarle said:

You can change your estimated interest that you will receive this year on your online personal tax account, which should help the situation.

How is this done ? Asking because we've had a similar issue recently and I just couldn't find anywhere to amend the expected interest amount (only Income from pensions and employment).

The link is unhelpfully labelled something like 'add investment income', which does include the option to amend estimated savings interest.

MsSED

Fatferds12 said:

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.

Thanks for this.  I don't have time just now to estimate my interest and as it is only for three months, I'll just take the hit this year.

eskbanker

MsSED said:

Albermarle said:

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.

I have to disagree and will not change my views, which is that HMRC should have told me that this would happen when I stopped the self-assessments? I am not tax savvy, and when they billed me in arrears for the first year after SA stopped, there was no indication that I would have to pay the next year's interest over a three month period.  In my opinion it is grossly unfair.  By the way, I am retired, so only have my pension and savings, which I may have to dip into to pay bills over the next few months.          

Regardless of your feelings about communications, HMRC is entitled to collect tax during the same year in which the income is earned rather than waiting until after it's finished.  As above, if you wish to correct the figure they're using with a better estimate than carrying forward last year's, you can.

molerat

MsSED said:

Fatferds12 said:

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.

Thanks for this.  I don't have time just now to estimate my interest and as it is only for three months, I'll just take the hit this year.

It is something you need to be on top of.  I already have my spreadsheet formulated for 2026-27 interest alongside the current 2025-26 one.   Just a case of starting with guesstimates and updating as each payment is made.

MsSED

molerat said:

MsSED said:

Fatferds12 said:

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.

Thanks for this.  I don't have time just now to estimate my interest and as it is only for three months, I'll just take the hit this year.

It is something you need to be on top of.  I already have my spreadsheet formulated for 2026-27 interest alongside the current 2025-26 one.   Just a case of starting with guesstimates and updating as each payment is made.

If we assume that HMRC estimates my 2026-27 interest as being similar to this year, will they spread my payments over 12 months rather than over three months?  Presumably I didn't get the tax code change until November 2025 because they only finalised what I owed them for 2024-25 in October 2025, if you see what I mean.

eskbanker

MsSED said:

molerat said:

MsSED said:

Fatferds12 said:

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.

Thanks for this.  I don't have time just now to estimate my interest and as it is only for three months, I'll just take the hit this year.

It is something you need to be on top of.  I already have my spreadsheet formulated for 2026-27 interest alongside the current 2025-26 one.   Just a case of starting with guesstimates and updating as each payment is made.

If we assume that HMRC estimates my 2026-27 interest as being similar to this year, will they spread my payments over 12 months rather than over three months?  Presumably I didn't get the tax code change until November 2025 because they only finalised what I owed them for 2024-25 in October 2025, if you see what I mean.

Yes, your 2026/27 code will be based on the most current data they have for savings interest, so will entail the relevant adjustment being made across the whole year.

mebu60

MsSED said:

Albermarle said:

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.

          

I have to disagree and will not change my views, which is that HMRC should have told me that this would happen when I stopped the self-assessments?         

In that case the answer to the question you posed in your original post 'Am I alone in thinking this is unfair?' would appear to be 'Yes' given all the other responses explaining why it works like it does and the options you have to mitigate the impact. 

MsSED

eskbanker said:

MsSED said:

Albermarle said:

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.

I have to disagree and will not change my views, which is that HMRC should have told me that this would happen when I stopped the self-assessments? I am not tax savvy, and when they billed me in arrears for the first year after SA stopped, there was no indication that I would have to pay the next year's interest over a three month period.  In my opinion it is grossly unfair.  By the way, I am retired, so only have my pension and savings, which I may have to dip into to pay bills over the next few months.          

Regardless of your feelings about communications, HMRC is entitled to collect tax during the same year in which the income is earned rather than waiting until after it's finished.  As above, if you wish to correct the figure they're using with a better estimate than carrying forward last year's, you can.

While I realise that HMRC are entitled to collect tax during the same year, I did now know that they would do it under the circumstances I have already explained, i.e. because they had not done so the previous year.  I may be naive but having spoken to several others about this matter, none of them had ever heard of this.  Sadly, we are not all experts.

MsSED

eskbanker said:

MsSED said:

molerat said:

MsSED said:

Fatferds12 said:

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.

Thanks for this.  I don't have time just now to estimate my interest and as it is only for three months, I'll just take the hit this year.

It is something you need to be on top of.  I already have my spreadsheet formulated for 2026-27 interest alongside the current 2025-26 one.   Just a case of starting with guesstimates and updating as each payment is made.

If we assume that HMRC estimates my 2026-27 interest as being similar to this year, will they spread my payments over 12 months rather than over three months?  Presumably I didn't get the tax code change until November 2025 because they only finalised what I owed them for 2024-25 in October 2025, if you see what I mean.

Yes, your 2026/27 code will be based on the most current data they have for savings interest, so will entail the relevant adjustment being made across the whole year.

Many thanks!

Dazed_and_C0nfused

MsSED said:

eskbanker said:

MsSED said:

Albermarle said:

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.

I have to disagree and will not change my views, which is that HMRC should have told me that this would happen when I stopped the self-assessments? I am not tax savvy, and when they billed me in arrears for the first year after SA stopped, there was no indication that I would have to pay the next year's interest over a three month period.  In my opinion it is grossly unfair.  By the way, I am retired, so only have my pension and savings, which I may have to dip into to pay bills over the next few months.          

Regardless of your feelings about communications, HMRC is entitled to collect tax during the same year in which the income is earned rather than waiting until after it's finished.  As above, if you wish to correct the figure they're using with a better estimate than carrying forward last year's, you can.

While I realise that HMRC are entitled to collect tax during the same year, I did now know that they would do it under the circumstances I have already explained, i.e. because they had not done so the previous year.  I may be naive but having spoken to several others about this matter, none of them had ever heard of this.  Sadly, we are not all experts.

It is a relatively new thing in the lifetime of PAYE.

Maybe 10 years or more ago the extra tax due for the first ~9 months of 2025/26 would have been collected via your 2026/27 tax code.  Along with the 2026/27 tax due on the (estimated) interest.  And anything owed for 2024/25.

Nowadays HMRC try to collect as much tax as possible during the current year (2025/26).