Tax on interest

eskbanker

SevenOfNine said:

I just got slapped with a tax bill of over £600 for HMRC underestimating savings interest. Thought it was a scam at first.......it wasn't!

HMRC obviously don't know how much you'll earn in savings interest - they'll often use the figure for the previous year as an estimate when adjusting tax codes to try to collect an approximation of the tax due, but if your interest changes significantly from one year to the next then obviously that estimate will be inaccurate and they won't be any the wiser unless you tell them (when you're aware of the variance) or the institutions do (some months after the end of the tax year).