Carl Haworth

Thank you! "After 06/04/24" is as expected. Can you confirm:- 1. That my first self-assessed tax return will be for TY2024/25, due to sent in (if "on paper") by 31/10/2025? 2.RE ANY UNPAID TAX DUE ON SAVINGS INTEREST Should a return for TY 2024/25, sent in by 31/10/2025, include savings interest earned in 2023/24? (You will have been informed of this by the banks concerned by around July 2024, I think.) If that is not the case, and I should return interest earned only in TY2024/25, not 2023/24, in my return in October 2025, how will I pay any unpaid tax on interest earned in TY2023/24? Thank you for mentioning that I should discuss changing my pay arrangements with the body that currently operates my tax code. a) I will have to find out how much advance notice they require because they should soon receive my tax code for TY 2024/25 from HMRC, and will need to disregard this if I am to be on s-a for that year. b) I have two other income providers, who currently operate BR codes. Do I need to contact them, as well, as they will presumably receive shortly instructions from you to continue operating these codes in 2024/25? Is it too late for me to avoid (a) and (b) by telling HMRC more or less now that I wish to be on s-a from 06/04/24, or can I not do that (as you do, of course, imply) until that date at the earliest?

It would be helpful to have a response to the immediately above, saying where, if anywhere, I have not understood correctly in my message of 21 days ago from today the situations set out by HMRC Admin 5, 25 days ago from today 06/01/2024). If my various understandings are all correct, it would also be helpful if HMRC Admin 5 would confirm this. BTW, I am aware that what I said 21 days ago assumed that I would have no further code notice for TY2023/24. Since expressing that assumption, I have received an amended code for this tax year, reducing my original tax-free allowance for the balance of TY2023/24 . But this does not imply any material change in my message to HMRC of 21 days ago.

I am a basic rate taxpayer on PAYE. For good reasons of my own, I would prefer to be on self-assessment. I would like this to take effect from the start of next tax year 2024/25 (from 06 April 2024). How do I apply for s-a so as to time its start with that date?

Thank you for your update. This signals a change from the old arrangements, where the code issued in the January of the current year for the following year estimates any savings interest and/or dividend income exceeding the relevant allowances by using the final data from the previous year. The final data for the previous year would be either as shown in a January code lasting the whole of the current year, or in an updated code in October based on data received from the banks around July of the previous year But what is needed for an accurate update is the final data for the current year. That is not available until into the following tax year. So my code dated January 2023 for 2023/24 includes no unpaid interest because it uses, as an estimate, the firm data for the previous year 2022/23 where there was no unpaid interest in the January 2022 code, and no updated code in October 2022 following HMRC's receipt of data from the banks. If data from banks etc sent to HMRC in/around July 2024 shows that my savings interest for 2023/24 does exceed the allowance, any unpaid interest will now be collected in my code for 2025/26, not in the second half of 2024/25. Your statement pasted in below refers:- "When HMRC receives your untaxed interest details for the 2023/24 tax year from the bank and building societies we would then review your record. Any underpayment of tax would be then collected in the 2025/26 tax code". That tax debt will be pended throughout 2024/25, meaning a rolling arrangement, starting with 2023/24 - 2025/26 where unpaid tax for 2024/25 will be collected in my code for 2026/27, and so on. This removes any need to pay off by lump sum a mid-year final figure for savings interest which currently may cause the original code to be reduced in value for the last six months of that year. If my understanding of the arrangements is correct, the following is what happens in the sequences of tax years starting with 2023/24:- 2023/24 My code for 2023/24 issued in January 2023 includes no estimate for saving interest. This is in line with 2022/23 HMRC data, where there was no change in October 2023 caused by data from the banks received in around July 2023. So my January 2023 code for 2023/24 should not change now within the current year. Any value difference from what it shows you now under tax on savings interest for 2023/24 which arises from the banks' data for this year arriving around July 2024 will be incorporated into a final calculation for 2023/24 carried forward into the code calculation for 2025/26 2024/25 You say:- "Your 2024/25 tax code would be updated to include the savings income from 2023/24 as an estimate. If your savings income has changed you can contact HMRC with the estimated details and we would amend your tax code." We see this as having more than one possible meaning. But I assume that you intend it mean the same arrangements that you summarize for the pair of years 2023/24 & 2025/26. If so, 2024/25 will have the same relationship with 2026/27 as 2023/24 has with 2025/26. My code for 2024/25 will be issued in January 2024 using the pre-July 2025 data. There should be no further change in my code during this year. If the final amount of unpaid tax for the year (calculated using the banks' data in around July 2025) differs from the January 2024 estimate, any value difference will be carried forward into the code calculation for 2026/27 And so on.

PERSONAL SAVINGS INTEREST INCOME I am a UK PAYE taxpayer. In this tax year (2023-24), like, I believe, many others in my income tax category, I anticipate receiving savings interest income in excess of my personal savings interest income allowance. I do not need to report this income to HMRC because they are notified of the amount/s by the relevant savings institutions etc. I understand that the tax due on any excess would be deducted from my 2024/25 coding in the summer/autumn of 2024 But I would prefer to pay the tax due as a lump sum rather than have it collected over the second half of the tax year via my PAYE coding! There are practical reasons for this preference:- First, altering my coding would reduce my normal PAYE income, and do this part-way through the tax year. To compensate tor this, I would have to set aside the total amount of reduction due in my net income at the start of the tax year, and draw on this month by month when the drop happens. Unlike possibly many other people in a similar situation, I do not need an expensive expert service to do this for me because I have the necessary skills and available facilities. But it would still be a time-consuming, exacting, messy and inconvenient/wearisome additional personal accounting chore. Second, the amount of excess interest is likely to vary considerably from year to year. I do not want a profile to be generated for altering a second year's coding automatically on the basis of the amount earned in the first year which exceeds the allowance, and so on. This means HMRC estimating on assumed, not hard, data, leading to demands for payments of shortfalls, or more tiresome work for me in having to claim refunds of over-deducted tax. All in all, this gives the prospect of a rolling, and potentially never-ending and distinctly unfunny, "comedy of errors". So may I alternatively open and use an HMRC personal tax account in order to pay any excess savings interest tax, as soon as the total due is known, in a lump sum, year by year? It would be simpler, and financially advantageous for HMRC in several ways, for me, and other relevant PAYE taxpayers who share my concerns, to be allowed the option of doing this. The class of personal income involved is one which cannot be known reliably until well into the financial year following the one in which the income was received - that is a year for which a coding has already been issued, and used for several months. PERSONAL DIVIDEND INCOME The basic situation is similar to the above, except that a shareholder on PAYE who has received dividend income during a tax year has to notify the amount personally to HMRC if it exceeded the personal allowance for that year. HMRC then collects the tax due in the same way as outlined above. Only a taxpayer on self-assessment avoids this mode of payment by having to include the total amount received in their annual tax return, as they are also required to do with savings interest earned. Again, I would prefer to pay the tax due as a lump sum, and again I ask if I would be allowed to do this via a personal tax account.