Tax on interest earnt in savings
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Space_Captain
Posts: 167 Forumite
in Cutting tax
Does anyone here declare if they earn over £1000 in interest ?
If it was £1200 for the year can you just leave it or will the tax office contact you ? I am thinking of leaving my ISA and heard that you need to declare any interest earned over £1000.
If it was £1200 for the year can you just leave it or will the tax office contact you ? I am thinking of leaving my ISA and heard that you need to declare any interest earned over £1000.
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Space_Captain wrote: »Does anyone here declare if they earn over £1000 in interest ?
If it was £1200 for the year can you just leave it or will the tax office contact you ? I am thinking of leaving my ISA and heard that you need to declare any interest earned over £1000.
An ISA is generally not taxable - there are some exceptions.
All taxable interest is declared. However if you are a basic rate taxpayer then you get a £1000 personal savings allowance. If you are higher rate, you get £500. There is also the start savings rate (which would only apply to basic rate payers earning below personal allowance + £5000 iirc).
Whether you personally declare it not will not make a difference - your bank will eventually declare it (and their figures take precedence over any you provide). It just makes a difference to when/how the tax is paid rather than if.You keep using that word. I do not think it means what you think it means - Inigo Montoya, The Princess Bride0 -
If you complete a Self Assessment return you have to declare all taxable interest.
If you don't already complete a Self Assessment return then having (taxable) untaxed interest is not normally a reason to need to complete one. Unless the amounts are very large, possibly over £10k.
Other than that you don't need to do anything, HMRC will send you a bill and/or adjust your tax code as necessary each year when they get the interest details from the banks.
I'd you get interest from elsewhere i.e. private loan, you would have to notify them of this.
The relevance of "£1000" depends on your personal circumstances.
Very low income individuals might not pay tax on the interest as they have spare Personal Allowance.
Those with higher incomes might be taxed on it but at that the savings starter rate of tax where up to £5,000 of interest is taxed at 0%.
Only those with income above £17,500, current tax year, can then benefit from the savings nil rate of tax (commonly known as the Personal Savings Allowance).0 -
Please do not expect either your bank/banks to notify HMRC correctly or HMRC to have the correct figure. It is your responsibility to ensure that they have the correct figure & that you are paying tax correctly. Last year they only showed a third of my interest & all my accounts are with 3 well known banks.0
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Please do not expect either your bank/banks to notify HMRC correctly or HMRC to have the correct figure. It is your responsibility to ensure that they have the correct figure & that you are paying tax correctly. Last year they only showed a third of my interest & all my accounts are with 3 well known banks.
Your bank is required to report the figures but they won't do so until several months after the tax year ends.
So they wont have reported last years (18-19) interest yet.You keep using that word. I do not think it means what you think it means - Inigo Montoya, The Princess Bride0 -
unholyangel wrote: »Your bank is required to report the figures but they won't do so until several months after the tax year ends.
So they wont have reported last years (18-19) interest yet.
Yes exactly, they got the 17/18 year wrong, I haven't got this years (18/19) yet. If they get it right I may well apologise.
I was told when they stopped me filing SA that they would have the correct figures - they obviously did not.0 -
unholyangel wrote: »...your bank will eventually declare it (and their figures take precedence over any you provide).
Can you provide evidence of this? TIA0 -
Well my figures for 17/18 took precedence over the banks (I have the paperwork to prove it). They accepted my almost £900 against the total banks under £300. Still no tax to pay but there being no tax to pay no longer stops them from charging you for getting it wrong. That changed a few years ago.0
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Can you provide evidence of this? TIA
Call HMRC and ask them what will happen if you provide a figure of £x and your banks provide a figure of £y. I bet they don't say "we'll take your word for it".
Or try it, assuming you can do so without affecting your tax liability/making a fraudulent return. Report one figure and then wait until after the figures have been reported (and hmrc have had time to act upon it) and see if your figure remains unchangedYou keep using that word. I do not think it means what you think it means - Inigo Montoya, The Princess Bride0 -
If you actually file a "return" then I would expect HMRC to use the figures on the return. And not change these if the banks reported anything different.
You are not obliged to tell HMRC the make up of the untaxed interest declared on your return so they have no way of knowing for certain of it was standard bank interest, from P2P lending, a private loan or anything else.
If HMRC doubt the figures declared on the return they would usually have to open an enquiry into the return to ask any questions about the amounts self assessed.
May be totally the opposite for people outside of Self Assessment though.0 -
Can you provide evidence of this? TIAunholyangel wrote: »Call HMRC and ask them what will happen if you provide a figure of £x and your banks provide a figure of £y. I bet they don't say "we'll take your word for it".
Or try it, assuming you can do so without affecting your tax liability/making a fraudulent return. Report one figure and then wait until after the figures have been reported (and hmrc have had time to act upon it) and see if your figure remains unchanged
I'll take that as a NO.0
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