savings interest - how accurate?

etienneg

HMRC has grossly overestimated my savings interest for the currect tax year, and hence for the tax code for next year. Soon I shall need to advise them of the correct figures. How accurate do these need to be? Do I need to include pence, or just whole pounds (and if the latter do I truncate or round)? Should this apply to each bank/BS account, or to the total?

I have a few old accounts with a nominal £1 or so (just to keep the login profile alive in case of wanting to open accounts in the future). So the monthly interest currently accumulates to £0.05 in one case, £0.13 in another, and so on. Must I include all of these, or can I ignore any where the annual total is less than, say, £1?

It would be good to avoid unnecessay work, but I don't want to miss out something that could result in an accusation of evading tax!

El_Torro

Since you are correcting HMRC's figures I would be as accurate as possible. That includes not ignoring accounts where there is only a few pence of interest accumulated this tax year.

I do a tax return every year and when I declare the interest it always rounds it down to the nearest full pound for me on the form.

eskbanker

When calculating tax liabilities from actual confirmed figures, HMRC rounds down income to the whole pound but if you have multiple accounts contributing to your annual total, I believe it's only once totalled that truncation is applied.

However, during the course of the year, you obviously can't give an exact figure until close to the end, so you can supply a rough estimate for PAYE coding purposes, and erring on the side of caution would avoid any potential accusations of underpaying tax during the year (it'll all come out in the wash eventually anyway).

It has been reported on here that they sometimes look for backup to supplied figures though, even during the year.

etienneg

Thanks to both of you who have replied for your experience and suggestions. I will include all accounts and give figures as accurately as possible.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81902727#Comment_81902727

Why do you feel you need to provide them with your own figures?

35har1old

https://forums.moneysavingexpert.com/discussion/comment/81902727#Comment_81902727

Ask HMRC for copy of details they hold but if you hold multiple accounts with one institution it will be a total not per account

DRS1

I have never done it myself but people on here have used the Add Investment Income button in their Personal Tax Account to try to correct HMRC's figures for savings interest. I have always assumed they simply added a total figure not 0.13p for this account and 0.05p for that account.

If HMRC then write asking for details I suppose you would have to break it down then.

What I have done a couple of times is call HMRC with revised figures and then I did give them figures with the pennies included.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81902841#Comment_81902841

If you adjust the estimated interest as you describe, they just used to accept it . However recently they have started sending out letters asking for more details/account breakdown.. The letters appear to be not uniformly the same and not everyone gets one ( according to other threads on here).

As it is only estimated interest, and it only affects the tax code, I am not really sure why they bother asking for a breakdown. It would be different if you were querying the actual interest figures being used for your tax calculation.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/81903393#Comment_81903393

I reduced their estimated figures as I have moved most of my savings into a ISA this year.

The form I got asks for the figures, not the estimated figures.

I cannot complete it until interest for /5/26 is credited to my accounts after 31 March.

Shylock_249

https://forums.moneysavingexpert.com/discussion/comment/81903393#Comment_81903393

Indeed HMRC have, in some instances, started asking for written details of estimated interest. I knew my and my wife's actual figures because all our non ISA accounts have already paid interest in this FY, we only have joint accounts so all interest receipts are the same. I accessed HMRC site and changed both on the same date. After some time mine was accepted but the wife received a letter with boxes to fill in interests, providers, account numbers, sort code etc. We filled that it and posted it off the same day. A month later and the wife's figure did NOT change on HMRC site. My wife then received a notification saying that she had to register for SA, they haven't made me do so.

My wife's PAYE for the FY 24 - 25 has still NOT been completed. I phoned them last week to ask if they would please complete 24/25 so she would (hopefully) start SA with NO carry-forward credits or debits. I advised the lady at HMRC that I estimated that my wife owed £1650 in tax for 24/25, she agreed and said she would send out a bill which should arrive within the next two weeks and my wife would receive a revised tax code letter.

No guarantee that FY 24/25 would be completed.

If I knew at the beginning what I know now, I wouldn't have bothered telling HMRC that their estimated figure was more that it should be by 2k - 2k each equates to £400.oo for the wife and £200 for myself. One might think that HMRC would use the current year's figure and lower it by a figure equal to the general lowering of Bank of England interest rates.

RG2015

@Shylock_249

“One might think that HMRC would use the current year's figure and lower it by a figure equal to the general lowering of Bank of England interest rates.”

Thank you for this. With all the gloom around the world these days it’s great to have a laugh out loud comment like this.🤣