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  • FIRST POST
    • cjv
    • By cjv 7th Apr 18, 7:58 PM
    • 199Posts
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    cjv
    Do you declare savings interest if it is under the tax free allowance?
    • #1
    • 7th Apr 18, 7:58 PM
    Do you declare savings interest if it is under the tax free allowance? 7th Apr 18 at 7:58 PM
    Just browsing over the tax return forms on my HMRC account to get an idea of what info I need when I come to submit it.

    Do we need to declare minimal amounts of interest from our personal bank/savings accounts if it is under the £1000 tax free allowance?

    Many thanks
Page 1
    • Dazed and confused
    • By Dazed and confused 7th Apr 18, 8:04 PM
    • 2,479 Posts
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    Dazed and confused
    • #2
    • 7th Apr 18, 8:04 PM
    • #2
    • 7th Apr 18, 8:04 PM
    Genuinely "tax free" interest such as from an ISA does not need to be entered on a tax return.

    All other interest remains taxable and should be declared just as it always has been (other than probably being declared as untaxed interest rather than taxed interest).

    If you have used all of your Personal Allowance then you will be taxed on the interest although it may be at either the starter savings rate (0%) or Personal Savings Allowance rate which is also 0%.
    • cjv
    • By cjv 7th Apr 18, 8:10 PM
    • 199 Posts
    • 99 Thanks
    cjv
    • #3
    • 7th Apr 18, 8:10 PM
    • #3
    • 7th Apr 18, 8:10 PM
    Thanks for that.

    The amounts are tiny, a few pounds per month from current and savings accounts and I was hoping I could get away with not having to go hunting through all my statements.

    I will be sure to declare it.
    • jimmo
    • By jimmo 7th Apr 18, 11:45 PM
    • 1,924 Posts
    • 2,381 Thanks
    jimmo
    • #4
    • 7th Apr 18, 11:45 PM
    • #4
    • 7th Apr 18, 11:45 PM
    If you have to complete a Tax Return you have to declare all of your income so I am afraid you will need to go through your statements. Just in case it matters to you, can I point out that Rewards and suchlike are not necessarily interest. For example I have a Halifax Reward current account which gives me £3 per month. That is not interest, its classed as an "annual payment" for tax purposes and counts as a gross amount of £3.75 with tax of £0.75 deducted at source. Click on "More about the £3 reward" in this link.
    https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account/
    Here is the HMRC view.
    https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim8020

    As the Rewards are not interest the income does not qualify as savings income and there is no special tax treatment. For basic rate taxpayers all this makes no practical tax difference. Non taxpayers can claim repayment of the tax deducted at source and higher rate taxpayers will have a little extra to pay but, as you have to complete SA Returns, you need to get this right.
    • cjv
    • By cjv 8th Apr 18, 6:28 PM
    • 199 Posts
    • 99 Thanks
    cjv
    • #5
    • 8th Apr 18, 6:28 PM
    • #5
    • 8th Apr 18, 6:28 PM
    If you have to complete a Tax Return you have to declare all of your income so I am afraid you will need to go through your statements. Just in case it matters to you, can I point out that Rewards and suchlike are not necessarily interest. For example I have a Halifax Reward current account which gives me £3 per month. That is not interest, its classed as an "annual payment" for tax purposes and counts as a gross amount of £3.75 with tax of £0.75 deducted at source. Click on "More about the £3 reward" in this link.
    https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account/
    Here is the HMRC view.
    https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim8020

    As the Rewards are not interest the income does not qualify as savings income and there is no special tax treatment. For basic rate taxpayers all this makes no practical tax difference. Non taxpayers can claim repayment of the tax deducted at source and higher rate taxpayers will have a little extra to pay but, as you have to complete SA Returns, you need to get this right.
    Originally posted by jimmo
    Thanks jimmo, that's very helpful as I was planning to include the monthly rewards from Halifax, TSB and COOP due to all the account switching I done last tax year!

    I think it will just be easier to wait until all my annual statements showing interest arrive from my banks. I think i binned the ones that I received from the accounts I closed though! I'm an idiot.
    Last edited by cjv; 08-04-2018 at 6:32 PM.
    • polymaff
    • By polymaff 8th Apr 18, 6:48 PM
    • 2,048 Posts
    • 885 Thanks
    polymaff
    • #6
    • 8th Apr 18, 6:48 PM
    • #6
    • 8th Apr 18, 6:48 PM
    Thanks for that.

    The amounts are tiny, a few pounds per month from current and savings accounts and I was hoping I could get away with not having to go hunting through all my statements.
    Originally posted by cjv
    You can. You download, or request, a certificate of interest paid covering 06/04/17 to 05/04/18.

    The newer banks offer this precise download. Other dinosaur banks - e.g. HSBC - have to be instructed to "supply certificates of interest paid covering the entire tax year 2017 to 2018 for all my accounts, single or joint, held with you during that period".

    Should you get into difficulties it will be these certificates which HMRC will want to see.

    NOTE: These are NOT the same as the annual statements.
    Last edited by polymaff; 08-04-2018 at 6:57 PM. Reason: NOTE:
    • cjv
    • By cjv 8th Apr 18, 6:56 PM
    • 199 Posts
    • 99 Thanks
    cjv
    • #7
    • 8th Apr 18, 6:56 PM
    • #7
    • 8th Apr 18, 6:56 PM
    Perfect! thank you, I will contact all the banks that have paid interest over the tax year including the accounts I have closed and request the certificates.
    • polymaff
    • By polymaff 8th Apr 18, 7:03 PM
    • 2,048 Posts
    • 885 Thanks
    polymaff
    • #8
    • 8th Apr 18, 7:03 PM
    • #8
    • 8th Apr 18, 7:03 PM
    Perfect! thank you, I will contact all the banks that have paid interest over the tax year including the accounts I have closed and request the certificates.
    Originally posted by cjv
    No, ask for them ALL.

    It is also important to be able to prove that some accounts have NOT accrued any interest.
    • RG2015
    • By RG2015 8th Apr 18, 7:39 PM
    • 1,126 Posts
    • 675 Thanks
    RG2015
    • #9
    • 8th Apr 18, 7:39 PM
    • #9
    • 8th Apr 18, 7:39 PM
    No, ask for them ALL.

    It is also important to be able to prove that some accounts have NOT accrued any interest.
    Originally posted by polymaff
    Yes, it is important. NatWest are really annoying because if you close an account they remove it and all its history from online banking.

    I know that I can request a statement but it is just more hassle. Virgin Money on the other hand retain all transaction history online for closed accounts.

    Just to be safe, I have not closed any accounts recently and if I did I would download my statements and recent year’s interest certificates. I wouldn’t want to cause problems just because I had been careless!
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