tax on interest earned

moneymaker4

When you fill in your tax return, you must declare interest earned on savings, even if you have had 20% tax already deducted by the bank before you got it.

Why is this, if tax has already been paid?

How does Gordon Brown know whether you have declared it all?

If your savings are spread around many instiutions, it can be quite a job to check all the interest, specially with internet-only accounts, which tend to not send paper statements, and if they transfer interest each month to a linked current account somewhere else, the interest does not even show up in the statement of the saving account that earned it.

It has taken me hours to go through each one...

Mikeyorks

Are you asking a question ... or just making a statement?

If the former. You're required to declare it because there could be overpaid tax ... or more tax to pay. And HMRC don't collate it the way you have to. All institutions paying interest have to download that data to HMRC .. and it's generally referenced by NINO .. but names / addresses are provided as back up.

Simple task for HMRC to bring it all together in their data warehouse and generate info for individuals. And put that through risk based analysis ... for instance looking at accounts with R85s filed but containing above £nnnn etc etc.

On the general theme - your Institution are required to send you a Certificate of Interest. Most do it voluntarily in late Apr / May .... some you have to ask. But saves grossing it up etc.

munk

How far back can you reclaim overpaid tax - I believe it's 5 years is that correct? Presumably if true that means (today being the start of the new 2008/9 tax year) that you can go back to 2003/4 now is that right?

Cheers.

UPDATE: Just found this:

Reclaiming overpaid tax on savings

which explains all for my purposes ta