Hello, Happy New Year. I am wondering if you could advise on what happens/what the best practice is for someone who owes tax on savings interest and is in both employment and self-employment. My concern would be that I proactively declare my interest in my next self assessment tax return and then learn that my PAYE tax code has also been automatically adjusted by HMRC following a report on my interest from the bank(s). Is there a way to ensure that I do not end up getting taxed on both ends? Does one route take precedence over the other for people in this situation or do I need to contact HMRC in advance to state my preference? I understand that any overpayment would eventually be refunded but it would be a comfort to know for a certainty how tax on savings interest will work in these circumstances and what, if any, reporting obligations are expected of me as a person both employed and self-employed. Thank you for your time.

Hi KSDZ91
HMRC is unable to provide specific or tailored advice throught the Online Community Forums and cannot comment on any form of scenario as we may not be in possession of all the relevant information.
In this instance it will depend on the amount of interest earnt, for example:

If you earn interest over your allowance but under £10,000 and are employed or receive a pension, HMRC will change your tax code so you pay the tax due automatically.

The code for the current year will be based on how much interest you had in the previous year.

Further information can be found here: https://www.gov.uk/apply-tax-free-interest-on-savings

Your options if you exceed your allowances are also covered here.

Not HMRC...you must include your savings interest on your SA form. It will be taken in to account in your calculation and if youve already an entry in your code then the tax paid on that source would already be greater than without it so the liability under SA would be less to account for it (the tax deducted under PAYE is a line in the calculation). To repeat, you do not have a choice, if you have interest and are required to complete SA for whatever reason in your case self employment) you must enter interest regardless of the amount.