I spoke today with HMRC about the tax I owe as a result of exceeding the limit allowed.
There’s been some chat herein over the past day, so I hope this is of use to those in the same boat. If it is, it may assist in bringing those other posts here but anyway….
Just had a tax bill for the above for the 24/25 tax year, which just seemed excessive. Spoke to a nice lady (2 minute wait by the way ).
Here’s the crux:
The assessment for this year is based on the 23/24 year - the interest received then - and it’s automatically assumed the same will apply this year !!
Now I didn’t know that - but it makes a huge difference because this year I’ve put funds into a cash ISA reducing the cash in a taxable savings account.
I nearly fell off my chair. But…
The HMRC agent explained that I could remove all the now-redundant accounts from last year and freshen up my tax account with the real data. She spent about 10 minutes going through this with me - and it’s job done.
Result: I’ll pay no tax on savings interest next year as I’ll ensure I now stay under the threshold.
Point here is I assumed upon receipt of the tax bill it would all sort itself out if I left things alone. It won’t.
That’s it folks - hope this hasn’t bored you. Just a word to the wise.
Meantime a merry Christmas to you all (even those with a sea view ).
I didn’t even need to talk to anybody. I submitted a correction on their website saying that all my cash savings had been in ISAs since last year so there was no reason to continue with a reduced tax code. A couple of weeks later my tax code was back to the standard one, backdated to April.
Today, she knew more than me. She reeled off all the savings accounts that had reported for last year. I hadn’t kept a running total, what with shifting money all year like we all did.
I was certainly surprised she was able so easily to tell me all that.
How they work is a bit weird. For the last several years I’ve got a statement saying that I owe them a bunch of money and, like clockwork, when I fill in the tax return, out pops a grand or so of a refund.
I’ve sat down and looked at all this before. It turns out, in my case anyway, that it all resolves itself eventually anyway. HMRC have just sent me another recent tax code amendment. Seems I don’t owe them as much as previously worked out. Some years, I’ve had some quite large refunds.
It’s a bit worrying that the sums involved are, for me, getting larger each year. It kicked off at a fiver a bunch of years back but has slowly but steadily risen to over a grand last year. If it keeps up, I’ll be able to give up the day job in a few years
).
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