Tax on Savings

Annemos

Yes, I might be inclined to leave the 25-26 as it is. They haven't got much time to correct it.

But you could try again to take out the 758 for 26-27.

SacredStephan

https://forums.moneysavingexpert.com/discussion/comment/81889657#Comment_81889657

You should report the total savings interest.

Annemos

https://forums.moneysavingexpert.com/discussion/comment/81890306#Comment_81890306

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.

Spivo46

https://forums.moneysavingexpert.com/discussion/comment/81890306#Comment_81890306

So i believe the banks and building societies inform HMRC of the interest earned. However, going back to my original issue i am not sure i have made progress

Deduction	Current tax year ends 5 April 2026	Next tax year from 6 April 2026
Untaxed interest on savings and investments	£573	£758
Total deductions	£573	£758

I am a non tax payer because my earnings are less that the personal allowance. I should not pay tax on my savings interest last year or the next tax year! They have taken the x2 figures above and reduced my personal allowance this year and next year. Its mad!

Annemos

The only thing you can do if you cannot get it changed in the system itself, is to write a letter explaining the problem. But it takes them a long time to reply (several weeks).

Neither my sister or I, had any luck with the Phone line. It made things worse.

Also, one year, the amount they were using as my Interest Income was several years out of date. (I had paid off my mortgage so my Savings interest had ceased. But it cropped up again in my Coding Notice 3 years later! ……. "We think you have a large amount of Interest Income that you have not reported!")

Spivo46

https://forums.moneysavingexpert.com/discussion/comment/81890369#Comment_81890369

Wow, HMRC it appears is totally out of control and mis-managed. No common sense is applied to the process. My latest issue is on the back of many mistakes they have made over my career. To make matters worse, they are hell bent on making any correction impossible.

Annemos

And in that case I just told you about, where it cropped up again 3 years later.

It was as if somebody had decided to take a look at the actual total balances in my Savings accounts, rather than looking at actual interest paid, as reported by the Banks. The trouble was, those balances they were working off were really out of date and they had actually dropped to NIL, 3 years before, when I paid off my mortgage.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81889657#Comment_81889657

@littlemissbossy

You report the actual amount you expect to receive, you definitely shouldn't deduct £1000 or £500. Or any other figure either!

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81889745#Comment_81889745

@Spivo46

Please ignore this suggestion. @Annemos has inadvertently made a bit of a mess of their own tax records and you would be better off avoiding making the same mistake.

Other income (not earned) is nothing whatsoever to do with savings interest.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81890313#Comment_81890313

Sadly you have gone badly wrong.