Personal allowance deducted by "Untaxed Interest on Saving"

Hello, My personal allowance was reduced by the "untaxed interest on saving" for £486. What is untaxed interest on saving about? and how this figure come up ? Best regards, Nancy

Hi,
HMRC receives details of untaxed interest from your bank/building societies at the tax year end and would then be used as estimate going forward.
If you are a basic rate taxpayer if your interest is less than £1000 you will not pay tax on the interest.
If you think the figure is incorrect you will need to contact HMRC to review:
Income Tax: general enquiries
Thankyou.

I'm interested in this too. What assumptions are made to get this figure ? I have the interest numbers from last year which HMRC have used to estimate next year's "untaxed interest on saving". I might see the formula if I could log into the account but I can't as attorney due to donor not having necessary documentation to create an account. Obviously HMRC assume the principal is still intact and the saver hasn't been on back to back cruises since last year. Does the assumed interest rate get uplifted to reflect better rates available since last year? Is it assumed that the same savings institutions still hold the funds ? In my case once I was appointed attorney I took measures to overcome fiscal drag with some 'fiscal WD40' so HMRC assumptions will be wide of the mark. Do we just have to suck it up and apply for a refund after the fact or can I inject some real facts into the formula so the estimate is not quite so wildly wrong?

Hi Sid2,
The figure of untaxed interest that we apply to your current year tax code is based on the total amount of untaxed interest you received in the previous tax year.
This amount is confirmed by your banks and building societies, and generally found to be the best indicator of what you would expect to receive from these banks and building societies in the current year.
If you would like to change the amount in your current year code contact us by webchat or phone here:
Income Tax: general enquiries
With the predicted amount of untaxed interest and account details for each account you would like to update.
Thank you. 
 

Webchat is useless just computer generated info directs you to government gateway account where you can only ADD untaxed revenue if you have a query about your untaxed savings interest being wrong you have to either phone (good luck on that one) or write which I personally have not tried yet but am going to have to from now

So, do you mean that the untaxed interest of 2023/24 is using the total amount of untaxed interest we receive in 2022/23? Will the actual untaxed interest of 2023/24 be reflected by end of 2024? or they will be reflected in following year ie 2024/25? Best regards, 

Hi Pui Yee Lee,
You are correct.
We use your confirmed 22/23 untaxed interest figure as an estimate for your untaxed interest in 23/24, and put that estimate through your 23/24 code. When your banks confirm your total 23/24 untaxed interest figure at the end of 23/24, we request or refund the difference between the confirmed figure and the figure in your code.
We then also use 23/24's confirmed figure as an estimate for 24/25 etc.
Thank you.