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Do "Banks" report savings interest to HMRC for you?

Practical Issues
Nimrod103
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Re: Do "Banks" report savings interest to HMRC for you?

#658412

Postby Nimrod103 » April 8th, 2024, 8:31 am

the0ni0nking wrote:
Watis wrote:I would make it a requirement that the account holder receives a copy of all information sent to HMRC.

That would help people complete their tax returns correctly, if nothing else.

I can't see any downsides with my suggestion - can you?

Watis


Don't people still get sent annual interest summaries from their bank? I just checked and some I get online whereas others I receive a hard copy of.



From my experience, though I may be a bit negligent, this only happens in about 50% of accounts. I am particularly worried about paperless online accounts and about savings bonds which pay interest only at closure. In some instances I may close the account and end my relationship with that institution. I then might forget about it entirely by the time I get to fill in my SA.

DrFfybes
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Re: Do "Banks" report savings interest to HMRC for you?

#658426

Postby DrFfybes » April 8th, 2024, 9:23 am

tlf67482 wrote:


I think the main problem here is the line "HMRC may use the information they have to adjust your tax code".

I read another article in the press yesterday saying people do not need to do anything as HMRC will automatically adjust your tax code.

So will they do it for you or not? I guess it is no, may do or yes depending on what you read. :shock:

If people are relying on articles in the press they may be going to be in for a shock when HMRC starts writing to them!


Every year we do SA and tick the "Do NOT change our tax code for next year" option.
Every year HMRC ignore it and change out tax code, meaning come Feb and March I need the last pay statements from everywhere to make sure we are on track.

Last month I discovered my 2 pensions in payment had different tax codes applied to them, not only were they different to each other, but also both were different to the one they'd been using prior to me submitting my previous SA, where they'd decided to reduce my allowance to account for the ERI and overseas dividends I'd earnt on assets I've since cashed in.

Oh, and HMRC did not inform me of any of these changes, I only found out from the 'payslips' and checking my SA account :(

Paul

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Re: Do "Banks" report savings interest to HMRC for you?

#658488

Postby Gersemi » April 8th, 2024, 3:40 pm

DrFfybes wrote:
Last month I discovered my 2 pensions in payment had different tax codes applied to them, not only were they different to each other, but also both were different to the one they'd been using prior to me submitting my previous SA, where they'd decided to reduce my allowance to account for the ERI and overseas dividends I'd earnt on assets I've since cashed in.

Oh, and HMRC did not inform me of any of these changes, I only found out from the 'payslips' and checking my SA account :(

Paul


Why would you expect the two pensions to have the same tax code? The tax code is a description of the amount of allowances allocated to that source of income, and necessarily your allowances can only be allocated once. Typically either one source will be entirely covered by allowances and the balance of allowances allocated to the other, or all the allowances allocated to one source and the other taxed in full at your marginal rate. I suppose your allowances could be divided equally and half allocated to each, but this is not normal in my experience (it wouldn't work if you were liable to higher rates of tax).

I would expect however for you to be sent copies of each of your tax codes whenever they are changed, but perhaps you have agreed to go paperless? HMRC in common with nearly everyone else seems very keen on this and I find you have to be vigilant if you want to avoid inadvertantly agreeing to it. I much prefer to have a paper copy of . . . well most things financial, much easier to collate.

However you can always check your Personal Account to see what codes are currently in operation, this is useful.


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