What is the best time to ask HMRC about interest record?

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/82058195#Comment_82058195

All of which nicely sums up why you should keep your own records. If you don't how will you know if what HMRC tells you is accurate?

etienneg

https://forums.moneysavingexpert.com/discussion/comment/82058195#Comment_82058195

What makes you think HMRC is there to provide a service? It's there to collect tax for the government! In doing so, of course, it has to interact with tax payers (whether individuals or companies). Now, quite often in legal interactions it makes sense to go beyond what is legally required to make the interaction quicker and smoother. But don't run away with the idea that HMRC must provide us with a comprehensive "service".

Newly_retired

The composite record of interest I received from my accounts with Principality, on request, did not include interest from two accounts closed earlier in the tax year. I don’t do spreadsheets, but I keep careful records every time an account pays interest, whether annually on maturity or monthly.
So if HMRC use figures from Building Societies rather than my figures, they might decide I have paid too much tax on interest!

Or do they not actually check my figures against those they receive from the BS?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82070229#Comment_82070229

Via what mechanism do you supply HMRC with your figures?

Edit: I see from your other thread that you self-assess - I must admit I don't know the extent to which figures supplied via SA are validated against BBSI submissions, but would assume this to be by exception rather than all the time…

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82070229#Comment_82070229

A few years ago I closed a Nationwide account and the closing interest did not appear on the summary of interest received for that year which Nationwide showed for me online. However they DID send HMRC the interest details for the closed account. So I think in your case HMRC will know about the closed accounts' interest.

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82070229#Comment_82070229

My guess is that HMRC will use a margin of error vs what you declare in your SA. It knows the data are iffy.

Newly_retired

iffy- in what way?

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82070775#Comment_82070775

It has gaps e.g., financial institutions don't always provide data on time, there are data matching problems*, some don't report interest and dividends at all (some foreign institutions, stockbrokers**) and HMRC's own uncritical extrapolation of prior year interest is an issue: it's regularly reported that it often assumes that accounts which paid interest in the prior tax year will pay the same interest in the next and HMRC doesn't know when accounts have been closed/emptied/rates dropped.

*IIRC the improved data collection proposals document stated that only 80% of data submitted by banks and BS' are matched to taxpayers. This is because it matches on name, address and DOB and there are issues with this. The proposed fix is to have customers' National Insurance numbers included in these data (well, duh).

**There are proposals to plug this gap by having them provide data as well

eskbanker

HMRC's own uncritical extrapolation of prior year interest is an issue: it's regularly reported that it often assumes that accounts which paid interest in the prior tax year will pay the same interest in the next and HMRC doesn't know when accounts have been closed/emptied/rates dropped.

My understanding is that their assumption about unchanging interest is only used for calibrating PAYE codings, which are only ever a provisional method of collecting anticipated income tax liabilities during the year, i.e. prior year figures shouldn't play any role in calculating the actual tax liabilities after the end of the tax year.