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Where Taxpayers and Advisers Meet

how can I see what savings interest figures HMRC holds for me

sleepycat
Posts: 9
Joined: Wed Aug 06, 2008 4:02 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby sleepycat » Thu Mar 14, 2019 5:39 pm

HMRC failed to include an amount for savings interest on my 2016-17 tax code or to issue me with an amended tax code in 2016-17 despite going public with the information that they were receiving information about savings interest from banks etc. They have not issued me with any P800 tax calculation for 2016-17 despite the fact that they would have been in receipt of information from banks about savings interest which would have resulted in an underpayment of tax for that tax year based on the code I was on. They did not use the information they had from banks to include an amount for savings interest on my 2017-18 tax code or to issue me with an amended tax code in 2017-18. Can I make an ESC A19 claim based on the exceptional circumstances rule?

sleepycat
Posts: 9
Joined: Wed Aug 06, 2008 4:02 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby sleepycat » Thu Mar 14, 2019 5:40 pm

HMRC failed to include an amount for savings interest on my 2016-17 tax code or to issue me with an amended tax code in 2016-17 despite going public with the information that they were receiving information about savings interest from banks etc. They have not issued me with any P800 tax calculation for 2016-17 despite the fact that they would have been in receipt of information from banks about savings interest which would have resulted in an underpayment of tax for that tax year based on the code I was on. They did not use the information they had from banks to include an amount for savings interest on my 2017-18 tax code or to issue me with an amended tax code in 2017-18. Can I make a claim under ESC-A19 based on the exceptional circumstances rule?

robbob
Posts: 2764
Joined: Wed Aug 06, 2008 4:01 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby robbob » Thu Mar 14, 2019 6:24 pm

Its pretty much 100% your responsibility to always notify hmrc when you owe tax.

so if you had interest on which you owed tax and there was no adjustment in your tax code - then no ESC would have been available - practicably speaking its the other way round that they could penalise you for not reporting that you owed them the tax on the interest.


I would however say if you did advise them of the amount of interest you were receiving and they made an adjustment to you tax code to collect the tax that would have been due AND they actioned a tax code change that looked reasonable to you but was wrong - perhaps under those circumstances they might look at an ESC - it doesnt sound like this is the case but the full chain of events as to what has happened and why and when is still not fully clear to me.

as advised previously hmrc should on request amend the amount of interest received on their system to match the actual amount received for each tax year if their systems have wrong totals.

sleepycat
Posts: 9
Joined: Wed Aug 06, 2008 4:02 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby sleepycat » Fri Mar 15, 2019 4:25 pm

Robbob

I got a letter from HMRC in November 17 telling me that they were getting savings interest figs from banks. The letter said "you don't have to do anything at his point...HMRC will now use information received from banks and building societies to calculate any tax owed on savings interest...we'll contact you if you have any tax to pay through a tax code or calculation".

I am not professionally advised or represented. Despite having income from a number of sources in the last couple of years my tax affairs have been stable and easy to understand. Until the change to the tax on savings.

I did not receive any change to my 16-17 tax code in year.

My 17-18 tax code didn't contain a figure for savings interest. I relied on the above wording in their letter and assumed HMRC would issue me with a revised tax code at some point in year.

That didn't happen.

My 18-19 tax code was the same - no interest figure

I got a P800 calculation for 17-18 dated 30 January 2019 at the end of the first week in February saying I had underpaid tax in 17-18. This was the first time any figure for savings interest appeared. The figure it cited bore no relationship to my financial records.

The next day I got a revised tax code for 18-19 also dated 30 January 2019. This was the first time a savings interest figure appeared in my tax code. Again it does not tally with my financial records. HMRC did not update their online guidance about this until 18 July 18. By which time I had checked and filed away my tax code.

Then I received a letter dated 28 February 2019 demanding payment of the 17-18 underpayment in full by 29 March despite earlier telling me in the P800 that this figure would be coded out.

Then about a week later I received a tax code for 2019-20 just dated February 2019 with a figure for savings interest which agin does not tally with my financial records.

So depsite writing to tell me that they would be using information from banks about savings interest and that I didn't need to do anything they failed for more than 2 years [3 if you count the 16-17 tax year] to make use of a source of information about an aspect of my income which they had in their possession. I am very ill and struggle at the best of times to manage my administrative affairs and require a lot of assistance from my family but am not professionally advised or represented.

That is my case re ESC A19 [exceptional circumstances].

As things stand I am still not able to locate accurate advice about the point in time when savings interest actually becomes liable for tax -ie which tax year does a particular piece of interest fall into for tax purposes. There is some advise that interest which is rolled up into a fixed rate bond is not taxed until the year it matures because although paid to the account it is not "available" to the taxpayer. Any clarity anyone can shed on this particular issue would be very helpful as I have been over my records for the third time now and cannot reconcile my figures with those HMRC are using. An average taxpayer might have no problem decoding this; with the illnesses I suffer from the disability they cause me I am not an average tax payer. One fact remains, when banks deducted interest at source my tax affairs were in order - if anything I overpaid tax - when the responsibility transfers to HMRC my tax affairs are reduced to the nost horrible mess.

D&C
Posts: 61
Joined: Thu Dec 22, 2016 10:04 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby D&C » Fri Mar 15, 2019 9:40 pm

I don't want to disappoint you but I really cannot see you have got a case to use ESC A19. What tax bill for 2016:17 are you trying to get HMRC to waive?

You seem to be massively overthinking this.

You have received a calculation for 2017:18 which you disagree with (because of the interest details).

Your 2018:19 tax code may also be wrong (but a tax code is in any case just a provisional attempt to collect the correct amount of tax, there is nothing unusual in adjustments being required after the tax year ends. If this didn't happen no one (outside of those filing Self Assessment returns) could ever get a refund of tax overpaid during the tax year.

So you need to provide HMRC with your interests figures and ask them to amend the calculation or, if they won't amend it they will have to explain their figures in more detail.

You can do the same for 2018:19 once the tax year ends (time is running out now to mess about with amending tax codes for 2018:19) and they should provide you with a calculation for that year.

Once you are happy with the final figures you can either make payment of the tax due (or try and have it included in your tax code if that is possible).

But why on earth would you want to drag 2016:17 into this?

Or do you want them to issue you with a calculation just so you try and claim ESC A19. Utter madness. Or am I missing something here?

sleepycat
Posts: 9
Joined: Wed Aug 06, 2008 4:02 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby sleepycat » Sat Mar 16, 2019 10:00 pm

I am not trying to get HMRC to waive the tax bill for 2016-17. I haven't had a tax bill for 16-17 but would imagine that if they have screwed up the tax for 17-18 and 18-19 then 16-17 is probably wrong too as it was the 16-17 year where the change to the way savings interest was being handled for tax purposes was being introduced. I mentioned 16-17 only for chronological purposes.

My ESC A 19 Exc circs case would relate to the 17-18 year for which I have a P800 calculation on the basis that for 3 years now they had figures from the banks about my savings interest and didn't use them when they generated my tax code. My point is, under ESC A 19 HMRC did not make timely use of information they had in their possession for over 3 years allowing arrears of tax on savings interest to build up. The Low Incomes Tax Reform Group indicate on their website that in such a case a taxpayer can make a case for the application of ESC A 19.

robbob
Posts: 2764
Joined: Wed Aug 06, 2008 4:01 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby robbob » Mon Mar 18, 2019 9:04 am

As things stand I am still not able to locate accurate advice about the point in time when savings interest actually becomes liable for tax -ie which tax year does a particular piece of interest fall into for tax purposes. There is some advise that interest which is rolled up into a fixed rate bond is not taxed until the year it matures because although paid to the account it is not "available" to the taxpayer. Any clarity anyone can shed on this particular issue would be very helpful as I have been over my records for the third time now and cannot reconcile my figures with those HMRC are using. An average taxpayer might have no problem decoding this; with the illnesses I suffer from the disability they cause me I am not an average tax payer. One fact remains, when banks deducted interest at source my tax affairs were in order - if anything I overpaid tax - when the responsibility transfers to HMRC my tax affairs are reduced to the nost horrible mess.
Any savings institution will be able to provide you with a yearly tax certificate confirming the amount of interest and tax deducted for that year, often these fixed term types have an ability to pay tax annually or at the end of the term - often the choice is yours when you sign up for these plans. It should be relatively obvious from the plan documentation though. Note your ability to draw the money from the pot is something that will not be relevant when deciding when interest has been credited or not - the date the interest shows up on the statement and increases your balance is the relevant date for tax purposes - note this would not be the case if its a memo note showing interest accrued to date but not credited to the account.

As for hmrc using unreliable totals, upon request i would expect them to detail how their figures have been calculated - other than the first year i would expect figures in your coding to be complete estimates based on prior year totals - these estimates can be changed upon request for your better estimates or actual figures - hmrc should always be able to confirm whether figures are "estimates" or actual totals based on info provided by your bank - you may need to specifically ask them though that question to find out.

Note come the end of the year the onus is always on you to communicate the actual amount of interest received to hmrc - presuming there is a tax consequence involved.

When sorting this i would ensure actual interest totals for each year tax year are confirmed and agreed with hmrc before sorting out how the p800 calcs need to be revised.

sleepycat
Posts: 9
Joined: Wed Aug 06, 2008 4:02 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby sleepycat » Mon Mar 18, 2019 4:56 pm

I came across advice on this issue in this link

https://www.telegraph.co.uk/money/ask-a-money-expert/when-does-the-interest-on-my-fixed-rate-bond-contribute-to-my-pe/

An HMRC spokesman said: “In general, interest counts towards a saver's PSA when it 'arises' - that is when it is received, or made available to the recipient.
"Interest has been made available if it is credited to an account on which the account holder is free to draw.”
Paragon Bank’s three-year bond pays 2.2pc each year. Customers can choose to have the interest paid into the bond or into an alternative account.
Assuming the saver chooses to have the interest paid back into the fixed-term account, the funds will be non-accessible for the term. A £15,000 deposit would earn £330 in the first year, £337.26 in the second year and £344.68 in the final year.
As the account does not permit withdrawals, the total interest of £1,011.94 would only be free to draw when the account matures in year three. The whole sum would then contribute to one year's PSA, breaching the limit regardless of tax-status.

Applying this logic then, in the case of a fixed rate bond to which interest is credited annually but which cannot be drawn upon until maturity it is not "available" to the recipient and would not be liable to taxation until the maturity period as per the Paragon example.

This seems to differ somewhat from your statement of the positiondoes it not?

robbob
Posts: 2764
Joined: Wed Aug 06, 2008 4:01 pm

Re: how can I see what savings interest figures HMRC holds for me

Postby robbob » Tue Mar 19, 2019 5:08 pm

This seems to differ somewhat from your statement of the positiondoes it not?
Hello sleepycat

I would agree 100% that that article is at odds with the following statement i made
Note your ability to draw the money from the pot is something that will not be relevant when deciding when interest has been credited or not
Apologies in this regard , i think i would disregard completely my quote above as it appears to not be factually correct.

I would say i can't ever remember a circumstance where a certificate of interest has been issued detailing the amount of tax for that tax year for that amount to be the wrong amount to be declared for tax purposes. I would be interested to here if anyone else has. I am ignoring circumstances where a provider corrects themselves due to an earlier error.

This being the case it seems sensible to start with the certificate provided by the savings institution and if that doesn't seem to tally with the terms and conditions of the savings plan to then discuss the reasons why that is the case directly with that institution to see if they can explain why that would be the case. Eg if there is some ability under exceptional circumstances for funds to be returned early that might change the rules.

If you do find out that any interest has actually been credited to an account and isn't taxable in that year it would be interesting to know.


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