R85 use if likely to earn more than allowance

dadsarmy

If interest from building society is more than my tax allowance - Gov advice says

"In this case it's important that you tell your bank or building society straight away, so that they can start to take tax off your interest. Otherwise you may have a tax bill to pay at the end of the year"

Important yes - but can I continue to use R85 and then pay tax later instead of reclaiming tax?

fengirl_2

No. The important thing is that if your earnings exceed your PA, you cannot register or continue to receive gross interest. Earnings come first as your PAYE code gives your PA's automatically, leaving none to set against interest. Interest can only be paid gross as a concession if there is no tax liability.

Mikeyorks

dadsarmy wrote: »

Important yes - but can I continue to use R85 and then pay tax later instead of reclaiming tax?

Just to echo Fengirl's resounding 'no'. You have to rescind all R85s as soon as you're aware you will go over the threshold in any year. The more fundamental data is on the Declaration you sign on the R85 (or undertake ... if your provider does this by 'phone and then writes to you) :-

I declare that • my income (or the saver’s income, if this form is completed on their behalf) is below my annual tax-free income limit and • if it increases above the annual limit I will tell the bank or building society straightaway. I understand that HM Revenue & Customs may check the information given on this form.