HMRC Plan to collect tax on interest

Collecting tax in high interest rate world. How and when?

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With interest rates of 1%pa the norm until relatively recently, many taxpayers' interest would have been within the £500/£1,000 savings allowance.

With savings rates of 5 to 6%pa now achievable, any idea how HMRC plan to collect tax due without bringing hundreds of thousands within SA?  I'm assuming they don't want a huge additional number of SATRs but I might be wrong.

Replies (12)

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By rmillaree
21st Sep 2023 12:20

huh - there has always been the procedure for peeps to pay taxes they owe without sa
- the limit for interest and sa is 10k. So everything is already in place and always has been.

Whoever owes tax neds to report it !!!

whether hmrc publicise it enough and make it easy enough is another matter - i think we all know the answer to that one.

in theory hmrc are probably collating decent info from third parties - i simply dont trust them to do calcs ever.

Note hmrc have missed a trick here - if banks report data to hmrc - they should also have been forced to provide online/paper form and annual report forcing those with larger incomes to have to confirm they will settle tax owed with hmrc (if applicable) and they could have had simple online system to report excess and pay tax due when annual statments are release if thats the only source with tax owing.

Hey ho a great system to ensure hmrc dont lose out would be to deduct 20% and let those due refunds contact hmrc

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By David Ex
21st Sep 2023 12:37

Ok, thanks for that. Dare I ask how those affected make contact with HMRC? Not an easy task from what I read on here.

I’d be very surprised if HMRC had any plans to publicise or indeed proactively use the data financial institutions have to report. It’s not really the way they work.

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Replying to David Ex:
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By rmillaree
21st Sep 2023 12:55

"I’d be very surprised if HMRC had any plans proactively use the data financial institutions have to report. It’s not really the way they work."

i think they do have plans in that regard - as per prior post though i wouldnt trust hmrc to get it right

Dare I ask how those affected make contact with HMRC?
https://www.gov.uk/tax-overpayments-and-underpayments

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Replying to rmillaree:
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By David Ex
21st Sep 2023 13:06

rmillaree wrote:

"I’d be very surprised if HMRC had any plans proactively use the data financial institutions have to report. It’s not really the way they work."

i think they do have plans in that regard - as per prior post though i wouldnt trust hmrc to get it right

Dare I ask how those affected make contact with HMRC?
https://www.gov.uk/tax-overpayments-and-underpayments

Thanks. I’ll forward the link to anyone who asks me!

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Replying to David Ex:
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By Not Anonymous
21st Sep 2023 18:25

David Ex wrote:

Ok, thanks for that. Dare I ask how those affected make contact with HMRC? Not an easy task from what I read on here.

I’d be very surprised if HMRC had any plans to publicise or indeed proactively use the data financial institutions have to report. It’s not really the way they work.

It's been proactively used for 7 years now and that has been explained (to some degree) on gov.uk ever since the TDSI scheme ended on 5 April 2016.

If you have non SA clients you should be seeing an increase in P800 or PA302 calculation this year or next.

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By More unearned luck
21st Sep 2023 13:15

I expect HMRC to rely on the data the banks and building society sends them and that their computer system is whiz enough to link the data to individual taxpayers' records and that the taxpayers will be sent P800 calculations or SA800 simple assessments.

Some taxpayers might be aware of and fulfil their s 7 obligation by writing to HMRC with details of their interest income.

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Replying to More unearned luck:
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By David Ex
21st Sep 2023 13:19

More unearned luck wrote:

I expect HMRC to rely on the data the banks and building society sends them and that their computer system is whiz enough to link the data to individual taxpayers' records and that the taxpayers will be sent P800 calculations or SA800 simple assessments.

Some taxpayers might be aware of and fulfil their s 7 obligation by writing to HMRC with details of their interest income.

Should be that simple but I’d certainly always suggest people are proactive and understand what adjustments might appear, especially if it’s Coding adjustment.

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By Geoff56
21st Sep 2023 13:53

I know of someone (pensioner) who is going to have to pay tax on interest received, for the first time in years. They were worried about having to sign up to SA but were saved by the arrival of a P800, which included correct details of interest received, presumably supplied by the bank/building society.

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Replying to Geoff56:
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By rmillaree
21st Sep 2023 15:31

wowsers - surprised it wasnt twice their actual income (do they double up on joint accounts ??)

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Replying to rmillaree:
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By Geoff56
21st Sep 2023 15:54

She's a widow, so no joint account involved.

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By Catherine Newman
21st Sep 2023 22:33

None of us can speculate. Only PBs can take this up on our behalf and must be at the highest level and not via the Agent Forum.

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Replying to Catherine Newman:
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By Not Anonymous
21st Sep 2023 22:48

Catherine Newman wrote:

None of us can speculate. Only PBs can take this up on our behalf and must be at the highest level and not via the Agent Forum.

This has been happening for many years now. Maybe having extra tax to pay will be more common now but it certainly isn't anything new.

https://www.litrg.org.uk/latest-news/news/171206-hmrc-are-set-use-bank-a...

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