Querying HMRC savings interest and money owed from previous years

thor

I have just received my new tax code and I believe it is over estimating the amount of savings interest I have been receiving. When I checked my personal account at tax.service .gov.uk I noticed that it said I had paid too little tax for the year 2024/2025. On clicking on the details I saw that it said I had received more interest than their original estimate so they were going to recoup the amount owed via paye. I have a feeling that this may have been due to them getting reports of my cash ISAs mistakenly and adding them to the interest total. So I want to see exactly which accounts have been reported to HMRC and was wondering which is the best way to do this. I remember in years gone past, you could get access to this online but that facility was removed quite a while ago so does anyone know if HMRC still provide this info and what is the best way to get hold of it?

Also I noted that for 2024/2025 it says that I owed from the previous year but on the same page it says that for the previous year (2023/2024) it states that 'You have paid the right amount of tax - There is nothing more to pay for this year'. So what is going on there? I think both of these problems have lead to a big reduction in my allowance and is being used to generate an estimate for the current year which will result in an over payment again.

molerat

You need to contact them and ask for a breakdown of interest received for each year, they will then send one out identifying account numbers and amounts. You can change this year's estimate in your on line tax account under " add investment income".

Annemos

On this note of the new 2026-2027 Tax code….

I had a pleasant surprise this week with the Inland Revenue Systems. They have brought some changes in, which have made it much easier for me to deal with the Tax Code.

I am signed up through the Gateway and this week I received a Mail from them saying "Check your 2026-2027 tax code".

This time I have noticed that the options offered have changed, and it is now MUCH easier to complete it properly when you go into your PAYE code on their website, review it and want to make changes. They give 3 clear options:

Do you have other income that is incorrect?

Do you have other income that is missing?

Do you have other income that has ended?

My changed amount is also the amount of Interest Income being estimated.

I am not on Self-Assessment. After year-end, they do Simple Assessments for people like me, apparently. (I have just seen one for our Mum who passed away, while going through her documents. She had income owed on her Interest Income and a letter was sent out to her after the end of the Tax Year.)

This week when I went into the PAYE section on my own account, to add additional interest income to the 2026-2027 tax code, I used the middle option above. It did not give a particular line where we could call it interest income, so I have called it "other income (not earned)". And I put in there the amount after I had taken off the 1000 pounds tax free.

The changed code has come back after 2 days, and it now looks good to me!

Maybe you can take a look at this and try the first option or the 3rd option to take interest income out. (Having done your own estimate.)

Albermarle

 And I put in there the amount after I had taken off the 1000 pounds tax free.

I am pretty sure you are not supposed to do it like that. The £1000 is actually taxable income, but taxed at 0%

You should tell HMRC what the actual amount of interest is.

Annemos

https://forums.moneysavingexpert.com/discussion/comment/81890016#Comment_81890016

But…… where I was entering, through the PAYE section in my account, there is only a Category for "Other Income (non-earned)", so how do they know it is actually Interest Income?

I took 1000 off of my Interest before entering it and now my Tax Code calculation they have sent me is correct.

It says my deductions are

State Pension 12,200

Other Income (not earned) 1500 (My actual interest is 2500)

Those two are what is reducing my personal allowance.

PS And the 1000 is a personal savings allowance I think, not a 0% tax band, if that makes any difference. In my comments I am referring to the actual 1000 pounds Savings Allowance

(Not that "up-to-5000 starting rate for savings".)

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81890315#Comment_81890315

Just for future reference you have now made a bit of a mess of your tax records.

Other income (not earned) is a completely different thing to savings interest. You should have used the (not very well named) add missing investment income option.

When the banks and building societies report your (taxable) interest HMRC will records it as untaxed interest so you will have duplicated entries.

I would suggest rectifying this sooner rather than later may save you a lot of grief in the long run.

Also, there is no "allowance" specifically for savings interest, there are two 0% tax bands, one of which is known as the Personal Savings Allowance.

And you should notify HMRC of the actual income (even if estimated), not knock off £1,000.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye130035

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye130060

Annemos

https://forums.moneysavingexpert.com/discussion/comment/81890456#Comment_81890456

Could it be that the option was not available to me, because in the 2025-2026 year I had NO interest income at all. So there was no line available for me to use. I looked very carefully for anything that looked like Investment Income of Savings Income.

Won't this happen? …….

I pay my correct tax through the code as it now is. This is just for the current Coding Notice 26/27.

Then at the end of the year…. HMRC will get the actual amounts from the Building Societies and Banks and they will add them to my Pensions. And work out the actual tax. Then they will compare that to the tax I have actually paid through the PAYE and assuming that my estimate was reasonable, there will not be any more tax to pay.

If they are using actual numbers when they calculate the actual tax at the year end… why would they also be adding on again my estimated amount?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81890497#Comment_81890497

You are missing the point, in HMRC eyes you now have an additional source of income.

In addition to any untaxed interest.

Do you really want to pay tax on £1,500 of "other income (not earned)" AND whatever tax is due on your interest?

When I look at my online tax account there is this option, add investment income and untaxed interest is one of the income options available.

Although at the moment it only gives options to give information for this tax year or the prior one, not the forthcoming year.

Annemos

THAT is my problem then. Do you have any idea when they will bring that entry into effect for 2026-2027? After April 6th?

Is my best bet to go back in and take it out now? Then adjust my Coding notice to put the proper amount of interest in at a later date. (After April).

Thank you everso much for your help. We end up really confused with this system.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81890515#Comment_81890515

I would definitely get it sorted now, the longer you leave it the more likely HMRC are to question why you would tell them something and do nothing if it was wrong.

When you look at your Personal Tax Account (the pages for this tax year, not next tax year) you should be able to see what untaxed interest figure HMRC currently have (if any).

Annemos

They have zero because for 2025-2026, all my stuff was in ISAs.

This year our Mum just died and so we got some funds from the probate. This pushed me over the ISA limits for 2026-2027. That is what I was so unsuccessfully trying to notify them of.