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.
 

This is not about how the income is taxed. This is about telling HMRC about the gross income received, bearing in mind penalties might be levied for just not disclosing within the correct time period. So, once again, if I receive 2023/24 gross taxable income in excess of the personal savings allowance under which circumstances do I have to formally disclose to HMRC?

Hi,

If the savings income is not from UK banks or building societies, you need to report this by 31 January 2025.

Thank you

Dear HMRC Admin, At the same question, but I’m not a tax resident, if I also received over £10000 in my international account which based in Isle of Man , should I need to report tax as well?

Hi Chris Wong,
Please register for self assessment as self employed as normal, as a single UTR is all that is required for multiple trades.  
This will ensure that class 2 and class 4 NIC can be applied to your net profits.  (Set up as self-employed (a 'sole trader'): step by step).
 As you will have more that one busines running side by side, you will need to keep separate accounts for each business.  
When completing your self assessment tax return, you will declare the gross turnover and expenses for each business separately, with each business declared on its own individual SA103 supplementary page.  If your combined gross turnover from all your business ventures exceeds £85000, then you may need to register for a VAT account.  
Have a look at the guidance at (When to register for VAT) for more information on VAT.
Thank you.

 

Dear HMRC Admin, Thank you for your replying first. Could you please clarify again to me about that if a non-UK resident who only earned saving interest around £5000 per year(no any business or trade), Do I need also report tax return as well? How much need to report tax return? Over £10000? Or £12570 or £17570? Best regards 

Hi Chris Wong

As a non UK resident, if you have received more that £10000 in UK savings and investments or more that £10000 in dividends, then you need to declare them in a self assessment tax return.  
To be sure whether you need to complete a tax return, please check out the self assessment criteria tool, as something else may bring you into self assessment (Check if you need to send a Self Assessment tax return).

Thank you

Hi Admin, I understand I need to submit a self assessment return when my annual interest income is over £10000. Would HMRC just use the self assessment to calculate the tax on interest rather than using the interest statement provided by financial institutions. Thank you.

Hi
The tax due on your savings interest will be calculated when you submit your Self Assessment return - if a calculation of tax is provided by your financial instituations, it should usually match our own, though the amounts calculated by your Self Assessment return will be based on your overall income from all sources declared for the year.

Hi Admin, Thank you for your reply. If I only have interest income and salary income but no other investment income, I'm quite frustrated do I still need to submit Self Assessment Return for the interest I earned in UK is over £10000 because my financial institution also will tell my interest income to HMRC?

Hi,

That is correct. We do need you to declare interest of over £10,000 with a Self Assessment return.

If you need any advice or assistance in completing your return, though, please contact our Self Assessment team.

Self Assessment: general enquiries

Thank you.