Interest/Investment/Savings Tax Queries

I believe I'm going to go over my personal allowance of £1000, therefore have lots of questions for it, therefore posting here to ask for some help please. I have been told that I will be going over my £1000 allowance, as it is calculated not by the total interest I got for the each one year, but by the total amount of interest I obtained for the 2 year period that my account is fixed for, is that correct? Do I need to report to HMRC about it or the banks/building societies will report it, because I hear conflicting info around these forums and other websites that I come across? When and how will i be taxed? I heard that tax will be done through a tax code change and the tax will be obtained through my employment wage instead of my interests that are paid to my account, is that correct? Will I receive any letter/notification from HMRC in regards to being taxed or that my tax code has changed? If my investment/interest/savings don't go over £10,000, then I don't need to do a self assessment form is that correct? I currently in the basic rate basic tax rate 20% and was told I will go into the Higher tax rate 40% band if my total income including my salary including interests/investments made from my bank/building societies accounts go beyond £37,700, is that correct? Thank you for your help.

Hi,

If you do not need to complete Self Assessment for any other criteria, you will only be required to complete one for interest if it goes above £1,000.

We are notified by financial institutions after the tax year has ended about untaxed interest during the year.

Once this information has been added to your record we will issue a P800 tax calculation if you have underpaid tax and usually we would look to collect any shortfall through your tax code in a later year.

If some of the interest pushes you into the 40% tax band you will be charged 40% tax on the amount in this band after considering the Personal Savings Allowance.

Thank you.

Thank you for your help, so the way it is done is not through tax code change to collect further tax through my employment wage, but rather I will receive a p800 or tax calculation letter to pay off the remaining tax is that correct? Apologies, I may have interpret this wrong, so I still have to complete a self assessment form if the total interest is over £1000 is that correct, because when I used the following website, it says that I don't need to do one? https://www.gov.uk/check-if-you-need-tax-return So would I receive a self assessment form alongside the p800 or I have to do one online? Thank you

Hi,

Unless you meet some other criteria, you would only complete a Self Assessment for £10,000 or more of interest.

The P800 would advise you of any further tax due, and HMRC would attempt to collect this back in a future years tax code.

You will be able to however pay this in full at the time if you prefer.

Thank you.

Thank you for your reply, so I can confirm now that I don't need to fill in a self assessment, since I won't over £10,000 in the interest investment. In the future, if I do go over the £10,000 and need to fill in a self assessment, do you know when I should fill one in and send to to HMRC? Also do you have a link that direct me to the form? If HMRC will collect the remaining tax in the future, do you know approximately when? Does that also mean I don't need to do anything else, since HMRC will handle the tax collection part. If I decide to pay in full, how do I pay? Can you provide some details please? Thank and Regards

Hi CLN,

You are correct. If you meet the £10,000 figure you will be required to complete a tax return.

You need to register by the October 5th following the end of the tax year. You can find more guidance here -

Register for Self Assessment

Thank you

Thank you for your reply, do you know when I will receive the p800? Will it be next year? And in the future, if there a tax code change, would I receive a notification on it? Thank you

Hi CLN,

We start to issue P800s from late June and most are issued by the end of September.

Thank you.

 

Thank you for your help, most of my queries have been answered, if I have any more questions I would respost again. Appreciate your help in answering them.

Hello My father, for the first time ever, will have income from interest from bank and building society accounts that amount to over £1000 (he's not entitled to the £5000 savings limit and he has used all his Personal Savings Allowance up with pension income). Am I right in thinking that the banks/building societies will inform HMRC of the interest and HMRC will adjust his tax code accordingly and we actually don't need to do anything? Thank you for your help. (I realise this is a question but I can only see a box to post a 'reply' apologies if this goes to the wrong place!

Hi,
That is correct. If there is any tax due we will issue a tax calculation and amend his tax code if possible.
Thank you.