Tax

Hi, I currently receive Universal Credit (UC) that is non-taxable. Currently, I don’t receive other income elsewhere from a job for instance. Am I right in thinking that because the amount of UC I receive in a tax year is less than £12570 then I don’t need to pay any interest received from savings or does savings and/or interest from savings get factored into the income amount too, in which case that may affect if I get taxed on interest? Does money from parents count as income? I understand that I may or may not pay tax on interest received on savings but are savings taxed? When I receive interest does that just get added to ‘savings’ afterwards or do I need to separate savings from interest? For instance, the next tax year would the interest received in the previous tax year just be added to savings or is that kept separate? Also, I’m slightly concerned that I might have had to pay tax on interest from previous years but I didn’t do because I didn’t have a proper understanding of this stuff I think. Do I need to check all this out or does HMRC get notified of how much tax I should pay on interest and any other possible things by banks/building societies or other places. Basically, would I have been informed that I needed to pay tax for anything? Thanks

Hi
Universal credit and money from parents do not count as taxable income, they would not be included.
Income from Savings is not taxed before it is paid.
Banks and Building Socities report the interest received after the tax year has ended and if any tax is due you will receive a P800 tax calculation.
Thankyou.

Hi, Thank you for this. Do you know if the P800 tax calculation would be sent to me or would I have to find out through my own efforts if any tax is due? Would banks and building societies report interest received on anything, for instance, ISAs, private pensions and other investments or is it limited to certain things? Thanks

Hi robinriver,

A P800 would be automatically issued if you have overpaid or underpaid tax.
All interest is reported apart from interest in an ISA as this is non-taxable.

Thank you.

Hi, I understand that interest from savings may or may not be taxed depending on the amount of interest received in a tax year. I also understand that banks and building societies notify HMRC of the amount of interest received from savings. In terms of the information supplied by banks and building societies, I would like to know if this has been the case for a long time or is that a recent development? The reason I ask is because I want to find out if I owe any tax from savings interest as far back as 2004/05 up to now. Just so you know, I wouldn’t know the amount of interest I received in each of these tax years up to now. Thanks

Hi robinriver,
This is a fairly recent thing and it would have been up to the individual to supply the information before.
Tax years 2004 and 2005 are now out of date and no information will be held in order to issue a calculation if additional tax was to be paid. 
Thank you. 


 

Hi, Thanks for that. When did banks and building societies start to automatically notify HMRC of the savings interest please? It sounds like from your answer it has been occurring before tax year 2004/05 and onwards and if that is the case then HMRC would have informed me if I needed to owe any tax from interest. Is this all correct, in other words, there is nothing for me to be concerned about and I don’t need to take any further action? Thanks

Hi
The banks started doing this in the 2016/17 tax year.
Anything prior to that it was up to the individual to tell HMRC of interest received.
As the year you are referring to is now out of date, you do not need to take any action.
Thankyou.

Hi, Thank you for that. I said 2004/05 and onwards, not just 2004/05. Does that mean I’m going to have to find out what interest I received in every tax year from 2005/06 up to 2015/16? Thanks

Hi,
These years are all out of date so you do not need to do anything.
Thank you.
 

Hi HMRC Admin 8, Thanks for that. Are you absolutely certain then that I don’t need to investigate by finding out how much interest I received from savings in all 12 tax years from tax year 2004/05 up to and including tax year 2015/16? I don’t need to do anything? Thanks

Hi
Yes.
These years are out of date and we cannot pursue any additional tax that may be due.
Thankyou.

Thanks HMRC Admin 10