Declarining savings interest

I have seen conflicting advice from HMRC Admins on here about what steps are needed if receiving more than the personal allowance in savings interest. Two months ago, 'HMRC Admin 19' stated, in response to a query, that "If you are in receipt of bank or building society interest, it is your responsibility in the first instance, to notify HMRC, so that this income can be factored into you Income Tax liabilities". However, 19 days ago 'HMRC Admin 25' stated "HMRC will be notified by the financial institution after the tax year has ended and we would update your records accordingly." The HMRC website doesn't seem particularly clear on what the responsibilities are for someone who doesn't need to fill out a tax return but earns more than their personal savings interest allowance. Given the increases in interest rates over the last year or so, a number of people who don't fill out tax returns will tip over the £1,000 savings interest mark for lower-rate taxpayers. It would be useful to have some clarity on exactly what is required - which forms need to be filled in, how savings income is classified (eg is it 'investment income') when notifying HMRC, and so on.

Hi Salfordian,

For savings interest this is classed as 'investment income' if someone receives more than £10,000 of investment income they are required to submit a Self-Assessment tax return to declare this.

If you are not required to complete a tax return, there is no set form for declaring investment income.

Financial institutions will declare savings interest that is not held in ISA accounts to HMRC, and we will update our records accordingly.

If you wish to do this before then, you will need to provide details of the accounts that you receive interest from by contacting our Income Tax team by telephone or in writing.

Income Tax: general enquiries

Thank you. 

 

Hi Bluebell74 Yes
Any dividends received from your GIA investments that exceed your annual, tax-free dividend allowance (£2000) or available personal allowance (up to £12570) will be subject to income tax.
The rate of income tax payable on dividend income depends on the overall level of your income.
Income tax may be payable whether you choose to receive dividend income or to reinvest it.  (Tax on dividends).
Thankyou.