Advice regarding tax on savings interest

Jimbouk

Hi all,

I’m looking for some advice regarding tax on savings interest.

I’m retired and my only income is from a company pension, which is taxed at source. My pension income exceeds the personal allowance of £12,570 and also the £17570 personal savngs allowance , so I understand as a 20% tax payer that savings interest above the £1,000 Personal Savings Allowance (PSA) is taxable.

For the 2024/25 tax year, my savings interest (outside of ISA's) was around £3,500. After deducting the £1,000 PSA, that leaves £2,500 taxable, which by my calculation means I owe £500 in tax.

I’ve seen conflicting information about how this should be dealt with. Some sources say I need to complete a Self Assessment to declare the interest, while others suggest that HMRC will automatically adjust my tax code to collect the tax due. For infinformation i have not been requested by HMRC to do a self asassessment

I realise it’s quite late with the 31 January deadline approaching, so any guidance or clarification would be very much appreciated.

Thanks in advance.

PS i hope this is in the correct forum :)

Isthisforreal99

Not sure what 'conflicting information' you have seen re Self Assessment as HMRC guidance is pretty clear - if your interest is less than £10,000 then there is no need to complete a Tax Return.

In theory HMRC should have sent you a calculation by now but they do seem later this year. To put your mind at rest you may want to write or phone them with the details.

FrugaiMacDugal

Try this wee gadget, might help.

You might be better on the Cutting Tax board.

flaneurs_lobster

If you haven't been asked to complete Self Assessment then you don't need to worry about it.

You are likely to be paying tax on your taxable interest earnings via PAYE and your tax code.

Have you checked your personal tax account at HMRC? This will tell you what your tax code is and what income is being taxed.

Jimbouk

Thanks for all the feedback its greatly appreciated