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  • FIRST POST
    • MoneySavingTart
    • By MoneySavingTart 13th Jan 20, 8:40 PM
    • 81Posts
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    MoneySavingTart
    Demand for tax on untaxed interest
    • #1
    • 13th Jan 20, 8:40 PM
    Demand for tax on untaxed interest 13th Jan 20 at 8:40 PM
    HMRC have just sent a demand for tax they say is due on untaxed interest for 2018/19.
    The demand simply states an amount of untaxed interest and the tax due on it.
    There are no details of the source of this untaxed interest and so it is impossible for me to check if they are correct.

    If any other company sent an invoice for payment they would have to say what was being paid for.

    Do I just have to accept HMRC are correct and pay up or an I entitled to a breakdown of where this interest came from.

    NB they are quite possibly correct that I have bank/BS interest untaxed but I feel i ought to be able check their working.

    Thanks
    MST
Page 1
    • molerat
    • By molerat 13th Jan 20, 9:23 PM
    • 21,817 Posts
    • 16,029 Thanks
    molerat
    • #2
    • 13th Jan 20, 9:23 PM
    • #2
    • 13th Jan 20, 9:23 PM
    Your bank supplies you with details of interest paid, the same as they supply to HMRC. Just check those figures.
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • BoGoF
    • By BoGoF 13th Jan 20, 9:26 PM
    • 5,893 Posts
    • 5,955 Thanks
    BoGoF
    • #3
    • 13th Jan 20, 9:26 PM
    • #3
    • 13th Jan 20, 9:26 PM
    They probably feel (rightly) that it is your responsibility to declare any interest that generates a tax liability.
    • MoneySavingTart
    • By MoneySavingTart 13th Jan 20, 9:42 PM
    • 81 Posts
    • 17 Thanks
    MoneySavingTart
    • #4
    • 13th Jan 20, 9:42 PM
    • #4
    • 13th Jan 20, 9:42 PM
    I've added up all the interest that I can think of, deducted £500 for 40% tax payer allowance and the figures are lower than HMRC total.
    I dont get asked for a tax return so I've not automatically sent them details of interest.
    MST
    • BoGoF
    • By BoGoF 13th Jan 20, 9:49 PM
    • 5,893 Posts
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    BoGoF
    • #5
    • 13th Jan 20, 9:49 PM
    • #5
    • 13th Jan 20, 9:49 PM
    You don't deduct the £500 from the amount of interest received - a common misconception.

    The calculation will show the first £500 taxed at 0%.
    • 00ec25
    • By 00ec25 13th Jan 20, 9:52 PM
    • 8,962 Posts
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    00ec25
    • #6
    • 13th Jan 20, 9:52 PM
    • #6
    • 13th Jan 20, 9:52 PM
    I dont get asked for a tax return so I've not automatically sent them details of interest.
    MST
    Originally posted by MoneySavingTart
    you have not appreciated the way the world works

    you are a higher rate taxpayer, it is YOUR RESPONSIBILITY to self assess your own tax position and contact HMRC to notify them of your workings and pay them what you think is due. It is not their responsibility to send you an invoice and workings

    HMRC receive independent info from elsewhere, (your bank), telling them how much untaxed income you have received. HMRC, knowing you are a higher rate taxpayer, do their own calculation, match that to yours, and accept what you paid if the 2 figures are close

    what HMRC don't like, and take a less forgiving attitude with, is a taxpayer not declaring untaxed income and leaving them to have to chase you for it. In such circumstances they tend to "slightly" overestimate and make you justify to them why their number is too high as you would have done had you self declared.

    you do not hold the moral high ground, and it is you who has to grovel to HMRC to get them to accept your (now late) declaration of a lower amount.

    https://www.gov.uk/check-if-you-need-tax-return
    If you had untaxed income
    You must tell HMRC if you had:

    more than £2,000 income from share dividends
    between £1,000 and £2,500 in any other untaxed income, such as commission or money from renting out a property
    You do not need to send a return for this. You can either:

    check your Income Tax and go to ‘Tell us about a change’
    call HMRC


    you already know that as a HR taxpayer the £1000 threshold is in fact reduced to £500, and you certainly had more than that, otherwise you would not have started this thread. So, whilst you may not need to do a full tax return, you certainly need to at least tell them about your untaxed interest in future...
    Last edited by 00ec25; 13-01-2020 at 10:01 PM.
    • Dazed and confused
    • By Dazed and confused 13th Jan 20, 10:14 PM
    • 6,142 Posts
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    Dazed and confused
    • #7
    • 13th Jan 20, 10:14 PM
    • #7
    • 13th Jan 20, 10:14 PM
    What calculation have you received?

    A P800 or PA302?
    • MoneySavingTart
    • By MoneySavingTart 13th Jan 20, 10:21 PM
    • 81 Posts
    • 17 Thanks
    MoneySavingTart
    • #8
    • 13th Jan 20, 10:21 PM
    • #8
    • 13th Jan 20, 10:21 PM
    It's a P800
    • Dazed and confused
    • By Dazed and confused 13th Jan 20, 10:30 PM
    • 6,142 Posts
    • 3,265 Thanks
    Dazed and confused
    • #9
    • 13th Jan 20, 10:30 PM
    • #9
    • 13th Jan 20, 10:30 PM
    You have a couple of options then.

    You can try and find the information HMRC have used on your Personal Tax Account on gov.uk. There is a huge thread about this data on the MSE savings board and finding it seems a bit of a dark art.

    Failing that then yes you are perfectly entitled to ask HMRC for a breakdown of the overall interest amount used in the calculation.

    deducted £500 for 40% tax payer allowance
    There is no allowance for savings interest. Some of the interest will be taxable at the savings nil rate of 0%, likely £500 from what you have posted, but you cannot deduct that from the amount included in your tax calculation.
    • xylophone
    • By xylophone 13th Jan 20, 10:55 PM
    • 32,002 Posts
    • 19,878 Thanks
    xylophone
    If you type savings and dividend tax into Google you should be able to pick up the pdf 2019 Final Guide from LITR which explains how interest and dividends interact with non savings income in respect of tax.
    • badmemory
    • By badmemory 14th Jan 20, 10:39 AM
    • 3,032 Posts
    • 4,896 Thanks
    badmemory

    what HMRC don't like, and take a less forgiving attitude with, is a taxpayer not declaring untaxed income and leaving them to have to chase you for it. In such circumstances they tend to "slightly" overestimate and make you justify to them why their number is too high as you would have done had you self declared.
    Originally posted by 00ec25

    This is not strictly true. I used to file self assessment & HMRC told me I must stop as they no longer needed it. The fact that they don't seem to be able to get either my interest or my untaxed income correct seems to be irrelevant. I now seem to be in the position of having to bully someone on the end of the phone to get them to put it right. It makes no difference to the tax payable. But how do I know that they won't come back years down the line & try fining me for letting them get it wrong!


    I am now so fed up with the mess they make of this that I may consider doing them out of almost £60 tax this year. For me a 53 week state pension year. They can't even get it right by their own rules in a 52 week year.
    • BoGoF
    • By BoGoF 14th Jan 20, 10:44 AM
    • 5,893 Posts
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    BoGoF
    I bet they didn'y say you must stop.

    Anyone csn elect to Self Assess if they wish.
    • lindabea
    • By lindabea 14th Jan 20, 1:00 PM
    • 1,211 Posts
    • 193 Thanks
    lindabea
    I bet they didn'y say you must stop.

    Anyone csn elect to Self Assess if they wish.
    Originally posted by BoGoF
    That's not true. My partner asked them recently to put him on SA as they always get his tax wrong, and they said that he does not meet their criteria.

    So it doesn't appear that anyone can elect to be on SA if they wish. HMRC must agree to it.

    Also, I don't get why someone on SA can make a tax payment online, yet someone who is on PAYE and needs to make a tax payment has to send HMRC a cheque. My partner got the HMRC bank details from their website but when he asked if he can make a payment using the online details, was told 'no' he must send the payment by cheque. Can someone please explain this bizarre situation.
    Before doing something... do nothing
    • BoGoF
    • By BoGoF 14th Jan 20, 1:04 PM
    • 5,893 Posts
    • 5,955 Thanks
    BoGoF
    That's not true. My partner asked them recently to put him on SA as they always get his tax wrong, and they said that he does not meet their criteria.

    So it doesn't appear that anyone can elect to be on SA if they wish. HMRC must agree to it.

    Also, I don't get why someone on SA can make a tax payment online, yet someone who is on PAYE and needs to make a tax payment has to send HMRC a cheque. My partner got the HMRC bank details from their website but when he asked if he can make a payment using the online details, was told 'no' he must send the payment by cheque. Can someone please explain this bizarre situation.
    Originally posted by lindabea
    It is true, you just need to insist......complain if neccessary.

    Re the payment, a Self Assessment debt creates a formal charge on the account which allows online payment.

    A PAYE P800 debt is 'informal' isn't a debt as such.

    Hard to explain but old PAYE systems to blame.
    • lindabea
    • By lindabea 14th Jan 20, 2:14 PM
    • 1,211 Posts
    • 193 Thanks
    lindabea
    It is true, you just need to insist......complain if neccessary.
    Originally posted by BoGoF
    That's fine for you to say that, but it's like hitting your head against a brick wall. In fact, I'd rather do that, as there is a greater chance that the wall may give way.

    My partner asked to make a complaint, but again, was told they do not have a complaints dept. Sometimes it's not worth the effort.

    His tax situation is now that he sent them a cheque on 14/11/19 for the underpayment shown on the P800; this was cashed on 19/11/19 (according to his bank statement) and the amount is still showing as outstanding as of today on his tax account. He phoned them on 12/12/19 and they couldn't even confirm that they have received the cheque or the enclosed letter. Absolutely appalling service.
    Before doing something... do nothing
    • BoGoF
    • By BoGoF 14th Jan 20, 2:17 PM
    • 5,893 Posts
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    BoGoF
    You will find details of how to complain on HMRC/.GOV website.
    • badger09
    • By badger09 14th Jan 20, 4:12 PM
    • 7,623 Posts
    • 7,129 Thanks
    badger09
    .................

    https://www.gov.uk/check-if-you-need-tax-return
    If you had untaxed income
    You must tell HMRC if you had:

    more than £2,000 income from share dividends
    between £1,000 and £2,500 in any other untaxed income, such as commission or money from renting out a property
    You do not need to send a return for this. You can either:

    check your Income Tax and go to ‘Tell us about a change’
    call HMRC

    ...............
    Originally posted by 00ec25
    Now I admit to being confused.

    I've just gone through the checklist in that link
    https://www.gov.uk/check-if-you-need-tax-return/y/no/less-than-50-000/no/no/2-500-or-more-in-interest-commission-or-cash-in-hand-payments

    Apparently I should have sent SA return as interest 2018/19 was over £2500, which is news to me!.

    I don't see that wording on the link you provided
    • badmemory
    • By badmemory 15th Jan 20, 12:43 AM
    • 3,032 Posts
    • 4,896 Thanks
    badmemory
    I bet they didn'y say you must stop.

    Anyone csn elect to Self Assess if they wish.
    Originally posted by BoGoF

    Actually you are right. What they said was that if I did one they would ignore it as they already had the figures.


    I already owe them £1k for 18-19, which they are hoping to take along with another £1k out of a taxable income of £2k, that they haven't even put a K code on, so that isn't going to happen. I gave up after 2 long conversations. The money is very happily sitting in my savings account
    • 00ec25
    • By 00ec25 15th Jan 20, 1:28 AM
    • 8,962 Posts
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    00ec25
    I don't see that wording on the link you provided
    Originally posted by badger09
    I thought you might fail that test

    if you fill out the questionnaire in such a way that the end result is no you do not have to do a tax return, the last bit at the bottom of the final page contains the info i have quoted because that is the fall back position for someone who is not required to do the full horrors of a tax return, but nonetheless has not paid tax on income they have received and so still have a duty to inform HMRC of that fact and pay the tax due on it.
    • RG2015
    • By RG2015 15th Jan 20, 7:48 AM
    • 1,779 Posts
    • 1,143 Thanks
    RG2015
    You can try and find the information HMRC have used on your Personal Tax Account on gov.uk. There is a huge thread about this data on the MSE savings board and finding it seems a bit of a dark art.
    Originally posted by Dazed and confused
    Once you have managed to thwart the HMRC Voldemort defences you will see a breakdown of interest by bank of last year’s actual as reported by the banks to HMRC which is used by HMRC for this year’s tax code calculation.

    Not only is it hidden behind a wicked spell but it is also thoroughly confusing, perhaps leaving one somewhat dazed.
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