Those who have earned interest on their savings are being urged to act now and contact HMRC if they’ve not yet received a letter from the tax authority.
Thousands of savers are putting themselves at risk of fines by not declaring owed tax on interest from savings.
According to the Association of Taxation Technicians (ATT), recent estimates show that an additional 893,000 taxpayers will have to pay tax on their savings by 2028 to 2029 due to frozen personal savings allowances and higher interest rates.
HMRC had told taxpayers it would use information received directly from banks and building societies to calculate any tax due on savings interest, and then issue either a Simple Assessment or adjust the individual’s tax code – but this hasn’t quite worked out.
It has been found that around a fifth of all bank accounts cannot be matched to a taxpayer record, and the responsibility for paying any tax owed remains with the individual.
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Those who were not contacted by HMRC by the 31st of March must now get in touch as soon as possible to avoid late filing fines.
Senga Prior, ATT President, said, “We raised concerns last year that, given these issues with the matching process, HMRC’s guidance to savers not already in self-assessment to simply leave it to them was not adequate. In December, HMRC updated their guidance to confirm that taxpayers who do not receive a letter by 31 March 2025 must contact HMRC as soon as possible to avoid a penalty.
“HMRC is making it clear that responsibility passes back to the individual to get in touch to pay tax, so we urge anyone who thinks they may owe tax on their savings interest to contact HMRC as soon as they can.”
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