HMRC interest earned on savings
Discussion
I'm sure that, a couple of years ago, it was possible on the Government Gateway to view a breakdown of both amount, and provider, of savings interest that had been advised to HMRC by each of your various savings providers for each tax year. But I seem not to be able to find this any more. Am I imagining this?
HMRC give the impression that all UK savings providers automatically provide this information to HMRC - but I have a relative for whom the HMRC 'actual' interest figure for 2023 /24 stated in a recent letter is too low by a factor of around 4. So clearly all providers do not appear to be doing so.
Thanks
PS The interest does not include ISA interest. It is all 'taxable' interest
HMRC give the impression that all UK savings providers automatically provide this information to HMRC - but I have a relative for whom the HMRC 'actual' interest figure for 2023 /24 stated in a recent letter is too low by a factor of around 4. So clearly all providers do not appear to be doing so.
Thanks
PS The interest does not include ISA interest. It is all 'taxable' interest
Complete long shot but if your relative is on a low income or pension they might be benefitting from 'Starting rate for savings'.
https://www.gov.uk/apply-tax-free-interest-on-savi...
https://www.gov.uk/apply-tax-free-interest-on-savi...
OddCat said:
I have a relative for whom the HMRC 'actual' interest figure for 2023 /24 stated in a recent letter is too low by a factor of around 4.
What you need to look at is the Annual Tax Statement issued by the bank or building society to your "relative". Even if he/she has lost or has not looked at that statement the information will still be available online from the bank or can simply be requested over the phone.How do you know the figure is low? You could, of course, just look through bank statements to check it, again either on paper or online.
Panamax said:
What you need to look at is the Annual Tax Statement issued by the bank or building society to your "relative". Even if he/she has lost or has not looked at that statement the information will still be available online from the bank or can simply be requested over the phone.
How do you know the figure is low? You could, of course, just look through bank statements to check it, again either on paper or online.
HMRC are stating that the 'actual' interest received for 2023/24 is £2,400 whereas it was actually nearer £9,000. This does not appear to be due to the deduction of the £6,000 Savings Allowance.How do you know the figure is low? You could, of course, just look through bank statements to check it, again either on paper or online.
Not sure whether anyone else ever noticed that HMRC used to provide a breakdown of their 'actual' figure with provider and amount in a list - but hat they don't do that any more.
Ydnaroo said:
Complete long shot but if your relative is on a low income or pension they might be benefitting from 'Starting rate for savings'.
https://www.gov.uk/apply-tax-free-interest-on-savi...
Their PAYE income was just under £12,500 and interest around £9,000 so, yes, they quality for the whole £5,000 Starting Savings Allowance + £1,000 savings Allowance but should still have to pay some tax on around £3,000 of the interest. https://www.gov.uk/apply-tax-free-interest-on-savi...
Edited due to fat fingers !
Edited by OddCat on Wednesday 8th January 16:34
Armitage.Shanks said:
Don't they knock off the figure of what allowances you are given and then show the 'untaxed interest' and then work out the amount owed?
No. The figure they give is 'actual' interest. And their tax calculation is then £600 light.I have a feeling the whole 'banks tell HMRC' thing might not be working quite as they think. Some if the individuals money is on a 'savings glhub' (Raisin) and I wonder whether some of the providers on ther think Raisin is declaring and vice versa.
The key thing is why the facility to see a breakdown of what HMRC are telling people is the 'actual' interest had disappeared. It can't be that hard to continue to display it surely?
Maybe they've got rid of it, because it made it obvious that not everything was reported to the Church, so people thought they could get away with not declaring stuff that hadn't been reported.
If you don't know what has or has not been reported, you run a risk of getting caught not declaring income.
Seems to be a lot of people finding out they've got an unexpected tax bill this year, as interest rates became more normal.
If you don't know what has or has not been reported, you run a risk of getting caught not declaring income.
Seems to be a lot of people finding out they've got an unexpected tax bill this year, as interest rates became more normal.
OddCat said:
Not sure whether anyone else ever noticed that HMRC used to provide a breakdown of their 'actual' figure with provider and amount in a list - but hat they don't do that any more.
Maybe it used to show when it was deducted at source? And perhaps they stopped doing that when they stopped deducting it?We've always had cash savings in my wife's name, and she's only needed to do Self Assessment for the last few years, so I don't know how it used to show. It certainly doesn't show now.
I would guess that if HMRC have a figure, they're just going off what was declared last year.
Hopefully somebody better informed than me can help with the following
Just had a tax code change to pay tax on interest earned. My wife has no income, the accounts interest was earned on were all joint accounts.
Is there not an argument for dividing the interest between my wife and I, thus lowering the tax payable?
Just had a tax code change to pay tax on interest earned. My wife has no income, the accounts interest was earned on were all joint accounts.
Is there not an argument for dividing the interest between my wife and I, thus lowering the tax payable?
e600 said:
Hopefully somebody better informed than me can help with the following
Just had a tax code change to pay tax on interest earned. My wife has no income, the accounts interest was earned on were all joint accounts.
Is there not an argument for dividing the interest between my wife and I, thus lowering the tax payable?
It should be assumed to be 50/50. But you can change that - but technically you have to assign ownership of the money that generates the interest. So if all the money belongs to your wife, then she pays the tax. Or split the ownership of the money, and therefore the tax, in whatever proportion you like.Just had a tax code change to pay tax on interest earned. My wife has no income, the accounts interest was earned on were all joint accounts.
Is there not an argument for dividing the interest between my wife and I, thus lowering the tax payable?
e600 said:
Hopefully somebody better informed than me can help with the following
Just had a tax code change to pay tax on interest earned. My wife has no income, the accounts interest was earned on were all joint accounts.
Is there not an argument for dividing the interest between my wife and I, thus lowering the tax payable?
Surely, if your wife is earning interest from joint accounts, there's a tax liability for her on that interest? She may have total income below the allowances before tax.Just had a tax code change to pay tax on interest earned. My wife has no income, the accounts interest was earned on were all joint accounts.
Is there not an argument for dividing the interest between my wife and I, thus lowering the tax payable?
My wife and I have several joint accounts that are interest bearing. We split the interest 50/50 for income tax reporting purposes. As it happens, her total taxable earnings (State pension and interest) is always just below the allowances before tax, although this may change for 2024/5.
R.
The Leaper said:
Surely, if your wife is earning interest from joint accounts, there's a tax liability for her on that interest? She may have total income below the allowances before tax.
My wife and I have several joint accounts that are interest bearing. We split the interest 50/50 for income tax reporting purposes. As it happens, her total taxable earnings (State pension and interest) is always just below the allowances before tax, although this may change for 2024/5.
R.
Yes correct she has no income and half the interest earned on the joint accounts are under her allowance.My wife and I have several joint accounts that are interest bearing. We split the interest 50/50 for income tax reporting purposes. As it happens, her total taxable earnings (State pension and interest) is always just below the allowances before tax, although this may change for 2024/5.
R.
I will contact HMRC and confirm what they have done.
Thanks all for their replies
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