Interest income

PGM

On the self assessment, at what point do you include interest income?

And, do you need to declare it if tax has been deducted at source and you're not a higher rate tax payer?

thanks :001_smile:

Dean

PGM wrote: »

On the self assessment, at what point do you include interest income?

You included it when you complete any self assessment!

And, do you need to declare it if tax has been deducted at source and you're not a higher rate tax payer?

Yes!

Regards

Dean

PGM

Dean wrote: »

You included it when you complete any self assessment!



Yes!

Regards

Dean

Thats what I thought!

Recently been speaking to two people, both have their accounts and tax return done by established accountants, but neither had been asked about interest earnt, for it to be put on the return :confused1:

hunterhouse

It is possible that the established accountants:

1) are already aware the two people do not earn any interest on their savings - for example - the bank accounts don't actually pay interest.
2) are just "getting away with it" - the two people are basic rate taxpayers so even if they should declare the interest earned on their bank accounts, they actually don't owe any more income tax.
3) are aware that the two people's interest is earned on tax-free accounts such as cash ISAs. In this instance there is no need to include the information on the income tax return.

Hunterhouse

PGM

hunterhouse wrote: »

It is possible that the established accountants:


2) are just "getting away with it" - the two people are basic rate taxpayers so even if they should declare the interest earned on their bank accounts, they actually don't owe any more income tax.


Hunterhouse

This is what I believe is the situation, and why I set up this thread. I wondered is it common practice for accountants to omit interest income if its not failling into the 40% tax bracket..

deanshepherd

I ask my clients every year if they received any bank interest, however small, and many simply say 'no'.

I suspect at least half of them actually do have a few quid of interest their accounts.

PGM

deanshepherd wrote: »

I ask my clients every year if they received any bank interest, however small, and many simply say 'no'.

I suspect at least half of them actually do have a few quid of interest their accounts.

At least you ask the question!

How would the HMRC respond if they do an inspection and find there is interest income no declared?

Monsoon

PGM wrote: »

At least you ask the question!

How would the HMRC respond if they do an inspection and find there is interest income no declared?

If there's no tax loss, then they would probably slap on wrist and say get it right going forwards.

We always ask but like Dean, people probably say nil even if its a few quid.

PGM

Monsoon wrote: »

If there's no tax loss, then they would probably slap on wrist and say get it right going forwards.

We always ask but like Dean, people probably say nil even if its a few quid.

Thanks Monsoon & Dean, I've got my head around it now.

Dean

Yeah all bases have been covered here. This is how we work also and to be fair - you can't work any other way! Firms would have PI claims coming out of their ears!

Regards

Dean