How to pay tax on interest.

Hi, If I got a saving interest between £1000 and £9999 from 2022/2023, how do I pay tax on it. And are my tax code would be changed based on it?

Hi Jimmy Chu,

If in Self Assessment collected in your tax return.
If no Self Assessment then at the tax year end the bank/building society send the interest details to HMRC and we will then review your
records and issue a calculation if tax is under or overpaid.
Your code would be updated with the interest details going forward as an estimate. 

Thank you.

Hi I don’t need to fill the self assessment yet but I believe I will need to in 2025 as I have quite a few bonds due that year. I have two questions: 1. For 3 year bonds, even though I have chosen for interest to be paid monthly, because I cannot have access to that interest, I will have to declare all the interests at the end of the three year term rather than annually? Is my understanding right? 2. If I have to fill a self assessment form (savings over £10000), hypothetically in 2023,but my savings will be under the threshold of £10000 in 2024, do I need to contact HMRC in 2024 again to give an update or do I just leave it as there won’t be any tax to pay? Many thanks

Good question, await a reply.

Hi Nwils,

1. The interest would be taxed in the tax year it was made available to you.
2. You can complete the 2023/24 tax return but if you do not meet the criteria for the tax year it can be cancelled in Self Assessment and reviewed through your PAYE records.

Thank you.