Savings Interest over £1,000 and Self Assessment
Savings Interest over £1,000 and Self Assessment Tax Returns
We find that sometimes, there is confusion around ‘savings interest’ and when you have to submit a self-assessment tax return because of received interest.
Hopefully, this brief explanation offers some guidance on the subject. If you wish to discuss your personal circumstances with us, please do get in touch.
When do I need to register?
If you are in receipt of interest from your personal savings, you do not need to register for self-assessment until the interest is over £10,000 in any given tax year.
However, once the interest is over the £1,000 threshold, HMRC will normally collect any tax owed by changing your tax code (automatically) if you are employed or get a personal pension. This is always on a retrospective basis though, so you will notice the change in your tax within the following tax year. If you are not employed, do not get a pension, nor complete a self-assessment tax return, HMRC will write to you to tell you if you need to pay tax and how to pay it.
Personal savings under £10,000?
There is no need to register for self-assessment until your personal savings are over £10,000.
Can do it voluntarily, but not necessary
Should there be a reason you wish to submit a self-assessment tax return when your personal savings exceed the £1,000 threshold, you may do so, but it is not a requirement as HMRC will automatically update your tax code to reflect your ‘estimated interest’ for the year.
Further information from The Government
Further information, directly from The Government website about personal savings income can be found here - Tax on savings interest: How much tax you pay - GOV.UK
To sum up…
There is no need to register for self-assessment until your personal savings are over £10,000.
should there be a reason you wish to submit a self-assessment tax return when your personal savings exceed the £1,000 threshold, you may do so, but it is not a requirement as HMRC will automatically update your tax code to reflect your ‘estimated interest’ for the year.
more information, directly from the government website about personal savings income can be found here (link ‘here’ to Tax on savings interest: How much tax you pay – GOV.UK)
