How to tell HMRC about interest earned

[PeteXXX]

As per title: after having the interest from a savings account paid, how do I inform HMRC of this and, as a PAYE person, how do I keep on the good side of them?

TIA

 

[Alex321]

Unless you are on self-assessment (I.e. Not PAYE), you shouldn't need to tell them, it should happen automagically. The savings account operator will tell HMRC, and they should be able to link it to your PAYE account.

It does sometimes mean you don't get the tax right in the year, and they adjust your tax code for the following year to take account of it (as happened to me this year).

 

[PeteXXX]

Unless you are on self-assessment (I.e. Not PAYE), you shouldn't need to tell them, it should happen automagically. The savings account operator will tell HMRC, and they should be able to link it to your PAYE account.

It does sometimes mean you don't get the tax right in the year, and they adjust your tax code for the following year to take account of it (as happened to me this year).

Thanks. It's via NS&I so i guess they know the ins & outs of each others accounting.

 

[JtB]

Thanks. It's via NS&I so i guess they know the ins & outs of each others accounting.

I know it’s a bit off topic, but even though NS&I are offering quite good rates of interest and are not constrained by the FSCS £85k protection limit, they get the worst customer reviews of any bank I’ve seen.
https://uk.trustpilot.com/review/nsandi.com

 

[Emanresu]

Thought the first £ 1000 was tax free and you didn’t need to declare it

 

[vickster]

Thought the first £ 1000 was tax free and you didn’t need to declare it

£500 if a higher rate taxpayer

 

[DCLane]

£500 if a higher rate taxpayer

That I didn't know. Thanks.

 

[OldShep]

I submit changes in income using the Government Gateway app

 

[vickster]

That I didn't know. Thanks.

https://www.gov.uk/apply-tax-free-interest-on-savings
And 0 if additional rate top band

and...
You need to register for Self Assessment if your income from savings and investments is over £10,000. Check if you need to send a tax return if you’re not sure.

 

[DCLane]

Thanks @vickster - I do a tax self-assessment return but missed the interest one.

 

[PeteXXX]

I know it’s a bit off topic, but even though NS&I are offering quite good rates of interest and are not constrained by the FSCS £85k protection limit, they get the worst customer reviews of any bank I’ve seen.
https://uk.trustpilot.com/review/nsandi.com

Interesting to read, but, personally, I've not had any problems with them (so far) but they do seem to run an antiquated system!

 

[SpokeyDokey]

As said it's all automated although you do need to declare anything outside the allowances on your SA if you complete one.

A couple of things to be aware of which may be of interest (unavoidable pun!)

If you invest in Fixed Rate Bonds be aware that unless the annual interest is Paid Away eg to your Bank a/c each year, then HMRC will assume that all interest earned across the full length of the Bond period will have been earned on the Bond maturity date - this may tip you into a tax liability situation. Cheeky little scheme by HMRC imo.

Secondly, the number of people I know who do not use all tax allowances available including non-working partners allowances is astonishing. Here:

ISA's are our primary investment vehicle - hopefully the tax-free status will never be removed!

Mrs SD transfers 10% of her Personal Allowance to me.

We use both £1000 Personal Savings allowances.

Mrs SD takes advantage of the £5000 Starting Rate for Savings 'mechanism'. This is often missed by many people. Needless to say, more of our FRB's are in Mrs SD's name than mine.

https://www.gov.uk/apply-tax-free-interest-on-savings

 

[Broadside]

If you need to do an online Self Assessment the deadline for registering is apparently today, or you risk a fine. You then have until 31/01/2024 to submit it.

 

[PeteXXX]

If you need to do an online Self Assessment the deadline for registering is apparently today, or you risk a fine. You then have until 31/01/2024 to submit it.

I'm purely PAYE. My S/E days finished last century..

 

[presta]

I don't know whether it's changed, but you used to have to fill in an R40 form at the end of the financial year.