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  • FIRST POST
    • Space Captain
    • By Space Captain 15th Jun 19, 12:10 PM
    • 108Posts
    • 29Thanks
    Space Captain
    Tax on interest earnt in savings
    • #1
    • 15th Jun 19, 12:10 PM
    Tax on interest earnt in savings 15th Jun 19 at 12:10 PM
    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.
Page 1
    • unholyangel
    • By unholyangel 15th Jun 19, 1:04 PM
    • 13,674 Posts
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    unholyangel
    • #2
    • 15th Jun 19, 1:04 PM
    • #2
    • 15th Jun 19, 1:04 PM
    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.
    Originally posted by Space Captain
    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.
    Money doesn't solve poverty.....it creates it.
    • Dazed and confused
    • By Dazed and confused 15th Jun 19, 1:16 PM
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    Dazed and confused
    • #3
    • 15th Jun 19, 1:16 PM
    • #3
    • 15th Jun 19, 1:16 PM
    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).
    • badmemory
    • By badmemory 16th Jun 19, 10:51 PM
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    badmemory
    • #4
    • 16th Jun 19, 10:51 PM
    • #4
    • 16th Jun 19, 10:51 PM
    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.
    • unholyangel
    • By unholyangel 17th Jun 19, 7:51 AM
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    unholyangel
    • #5
    • 17th Jun 19, 7:51 AM
    • #5
    • 17th Jun 19, 7:51 AM
    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.
    Originally posted by badmemory
    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.
    Money doesn't solve poverty.....it creates it.
    • badmemory
    • By badmemory 17th Jun 19, 10:49 AM
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    badmemory
    • #6
    • 17th Jun 19, 10:49 AM
    • #6
    • 17th Jun 19, 10:49 AM
    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.
    Originally posted by unholyangel

    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.
    Last edited by badmemory; 17-06-2019 at 10:53 AM.
    • polymaff
    • By polymaff 19th Jun 19, 10:10 AM
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    polymaff
    • #7
    • 19th Jun 19, 10:10 AM
    • #7
    • 19th Jun 19, 10:10 AM
    ...your bank will eventually declare it (and their figures take precedence over any you provide).
    Originally posted by unholyangel

    Can you provide evidence of this? TIA
    • badmemory
    • By badmemory 19th Jun 19, 11:46 AM
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    badmemory
    • #8
    • 19th Jun 19, 11:46 AM
    • #8
    • 19th Jun 19, 11:46 AM
    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.
    • unholyangel
    • By unholyangel 19th Jun 19, 8:59 PM
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    unholyangel
    • #9
    • 19th Jun 19, 8:59 PM
    • #9
    • 19th Jun 19, 8:59 PM
    Can you provide evidence of this? TIA
    Originally posted by polymaff
    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
    Money doesn't solve poverty.....it creates it.
    • Dazed and confused
    • By Dazed and confused 19th Jun 19, 9:20 PM
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    Dazed and confused
    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.
    Last edited by Dazed and confused; 19-06-2019 at 9:22 PM.
    • polymaff
    • By polymaff 20th Jun 19, 8:08 AM
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    polymaff
    Can you provide evidence of this? TIA
    Originally posted by polymaff

    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
    Originally posted by unholyangel

    I'll take that as a NO.
    • unholyangel
    • By unholyangel 20th Jun 19, 8:44 AM
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    unholyangel
    I'll take that as a NO.
    Originally posted by polymaff
    You're the one that wants evidence, why would I do the leg work for something YOU want?

    Do you really need something to tell you explicitly why HMRC will take the word of a uninterested third party over the word of an interested party? The same holds true for PAYE income btw. They'll take your word for it - until your employer submits different data. Once that happens, they'll no longer take your word for it.

    Do you live in an alternative reality where tax evasion doesn't exist and everyone tells the truth about their income because they don't want to pay less tax?
    Money doesn't solve poverty.....it creates it.
    • uknick
    • By uknick 20th Jun 19, 9:08 AM
    • 951 Posts
    • 429 Thanks
    uknick
    You're the one that wants evidence, why would I do the leg work for something YOU want?

    Do you really need something to tell you explicitly why HMRC will take the word of a uninterested third party over the word of an interested party? The same holds true for PAYE income btw. They'll take your word for it - until your employer submits different data. Once that happens, they'll no longer take your word for it.

    Do you live in an alternative reality where tax evasion doesn't exist and everyone tells the truth about their income because they don't want to pay less tax?
    Originally posted by unholyangel
    You made a statement which can only be taken one way; bank figures provided to HMRC trump any figures you put on your return, therefore HMRC will only use the bank provided figures. When asked to provide statutory evidence you can't as it appears your statement was based upon your own supposition.

    I don't disagree with you that a difference in figures may well be questioned by HMRC. But, one would hope HMRC will accept figures supported by an audit trail, not just some automatic feed from a bank.

    Also, how does it work in my case where no interest shows up against my personal account? And never has.
    • polymaff
    • By polymaff 20th Jun 19, 11:11 AM
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    polymaff
    You're the one that wants evidence, why would I do the leg work for something YOU want?

    Do you really need something to tell you explicitly why HMRC will take the word of a uninterested third party over the word of an interested party? The same holds true for PAYE income btw. They'll take your word for it - until your employer submits different data. Once that happens, they'll no longer take your word for it.

    Do you live in an alternative reality where tax evasion doesn't exist and everyone tells the truth about their income because they don't want to pay less tax?
    Originally posted by unholyangel

    Once again you present speculation as fact, then respond to a challenge with an abusive rant.
    Last edited by polymaff; 20-06-2019 at 11:28 AM.
    • unholyangel
    • By unholyangel 20th Jun 19, 8:05 PM
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    unholyangel
    You made a statement which can only be taken one way; bank figures provided to HMRC trump any figures you put on your return, therefore HMRC will only use the bank provided figures. When asked to provide statutory evidence you can't as it appears your statement was based upon your own supposition.

    I don't disagree with you that a difference in figures may well be questioned by HMRC. But, one would hope HMRC will accept figures supported by an audit trail, not just some automatic feed from a bank.

    Also, how does it work in my case where no interest shows up against my personal account? And never has.
    Originally posted by uknick
    No, my statement was based on my own knowledge - but that holds no weight here as I could claim to have any qualifications/experience and theres no way to verify it unless I provide personal details (and even then, no way to prove those details are mine). I also never mentioned a return.

    You're neglecting that the bank will have an audit trail. I haven't said that banks can't make mistakes or that you can't challenge the figure - just that your word will no longer suffice when the banks provide actual figures.

    Once again you present speculation as fact, then respond to a challenge with an abusive rant.
    Originally posted by polymaff
    I've never been abusive on these forums once - let alone again. Disagreeing with you is not being abusive.

    It is fact. If I say its something I know because xyz, will you be satisfied by that as an answer? No, because I could be lying. So I told you to ask HMRC so you can have it straight from the horses mouth.
    Money doesn't solve poverty.....it creates it.
    • badmemory
    • By badmemory 20th Jun 19, 10:27 PM
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    badmemory
    I suspect that HMRC know well that the bank figures are dubious. Audit trail!! Well that would be nice. The figure HMRC as already stated was less than a third of the real figure. I tried every combination of the taxable (not ISAs obviously) interest on my accounts & couldn't get close. One account alone was more than their total.


    So I repeat - you cannot trust the banks to get it right & HMRC to "transcribe" it correctly. You must work it out for yourself. If you speak to HMRC they will eventually admit that it is your responsibility & your's alone to get it right.


    Try reading a few of Dori2os comments - he works for them.
    • unholyangel
    • By unholyangel 20th Jun 19, 10:42 PM
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    unholyangel
    I suspect that HMRC know well that the bank figures are dubious. Audit trail!! Well that would be nice. The figure HMRC as already stated was less than a third of the real figure. I tried every combination of the taxable (not ISAs obviously) interest on my accounts & couldn't get close. One account alone was more than their total.


    So I repeat - you cannot trust the banks to get it right & HMRC to "transcribe" it correctly. You must work it out for yourself. If you speak to HMRC they will eventually admit that it is your responsibility & your's alone to get it right.


    Try reading a few of Dori2os comments - he works for them.
    Originally posted by badmemory
    The mistakes will never disappear completely - you always get inexperienced people or people who do what they think is right rather than seeking clarification (can't really second guess every decision!). But I would expect, as with any change in policy, that it should get slightly better with time. There's always an adjustment period when people need to get used to new rules and mistakes are more likely (to phrase it mildly).
    Money doesn't solve poverty.....it creates it.
    • Manxman in exile
    • By Manxman in exile 20th Jun 19, 10:52 PM
    • 2,612 Posts
    • 2,278 Thanks
    Manxman in exile
    I suspect that HMRC know well that the bank figures are dubious. Audit trail!! Well that would be nice. The figure HMRC as already stated was less than a third of the real figure. I tried every combination of the taxable (not ISAs obviously) interest on my accounts & couldn't get close. One account alone was more than their total.


    So I repeat - you cannot trust the banks to get it right & HMRC to "transcribe" it correctly. You must work it out for yourself. If you speak to HMRC they will eventually admit that it is your responsibility & your's alone to get it right.


    Try reading a few of Dori2os comments - he works for them.
    Originally posted by badmemory

    Out of curiosity (and because it may affect others) did you investigate why the banks' figures were wrong and get their errors corrected for future years?
    • badmemory
    • By badmemory 21st Jun 19, 7:54 AM
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    badmemory
    Out of curiosity (and because it may affect others) did you investigate why the banks' figures were wrong and get their errors corrected for future years?
    Originally posted by Manxman in exile

    No I didn't, although I probably should have. But I am so used to filing SA that I know my records are correct. I also wouldn't have known where to start. When I finally get the 18/19 figure I will investigate further.
    • polymaff
    • By polymaff 21st Jun 19, 8:59 AM
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    • 1,281 Thanks
    polymaff
    Out of curiosity (and because it may affect others) did you investigate why the banks' figures were wrong and get their errors corrected for future years?
    Originally posted by Manxman in exile
    I've come across quite a few reporting issues in recent years.

    Several have been due to digit swapping, i.e. 1,234 ending up as 1,324. This implies to me that the system is a lot more manual than you'd hope.

    Another is just wilful misunderstanding of how interest arises, resulting in interest arising in tax year x being reported in tax year x minus one. That particular organisation was forced to admit that they were getting it wrong but that, whatever, they felt no responsibility to correct their errors and that it was up to the tax-payer to argue it out with HMRC. They also stated that, whilst they accept that misreporting had happened, they had no intention of changing their procedures for subsequent tax years.

    Then there is also straight arithmetic error by the institutions.

    HMRC has talked of the "Death of the Tax Return" - implying that they will eventually rely on reporting by the institutions. I really don't see how this will work out. SA is our lifeline.
    Last edited by polymaff; 21-06-2019 at 9:23 AM.
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