There have been recent changes to the taxation of bank and building society interest, in particular with effect from 6 April 2016 interest has been paid gross. A personal savings allowance has also been introduced so most basic rate taxpayers will not pay tax on their interest if it is below £1000. For higher rate taxpayers the savings allowance reduces to £500. For people with modest amounts of interest the position is now straight forward. HMRC will receive details of your bank and building society interest directly, and if they consider that you are liable to pay tax then they will calculate the tax due using form P800. So far so good, however concerns have been raised that HMRC may make errors in their calculations particularly when joint accounts are held. HMRC can also adjust your Notices of Coding to collect what they consider is the unpaid tax. Errors will be made especially when historic data is used to adjust codes. If you do not complete annual Tax Returns then you should check both HMRCs tax calculations and your Coding Notices carefully to ensure that you are not paying too much tax. And of course, if you need any help, please contact Paul.Edwards@affordbond.com or use the Contact Form here on our website.
We are recruiting a Tax Junior to join our highly regarded personal tax team in Nantwich.