Self Assessment - Bank Interest - Contractor UK Bulletin Board

Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:

You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.

antuk replied

27 December 2017, 13:27
Thanks, thats what i thought has happened. I guess thats why its advertised as free interest as it wouldnt affect traditional employees in the same way
Leave a comment:
Chart Accountancy replied

27 December 2017, 13:21
Originally posted by antuk View Post

Yeah thats what it looked like.

I havent filed my SA with the accountant and the tax HMRC wants from me for this is less than they would charge me to file it so just wanted some opinions on if its HMRC being wrong or just their interpertation of the rules being in their favour (again!)

Dividends are top slice income, the psa does not extend your basic rate tax band so the interest income would restrict your basic rate dividends available.
Leave a comment:
antuk replied

27 December 2017, 12:27
Yeah thats what it looked like.

I havent filed my SA with the accountant and the tax HMRC wants from me for this is less than they would charge me to file it so just wanted some opinions on if its HMRC being wrong or just their interpertation of the rules being in their favour (again!)
Leave a comment:
Lance replied

27 December 2017, 12:23
I think what's happened is that the savings interest is calculated as income, even though it's not taxed in its own right.
That has pushed your dividends into the higher rate as the threshold is based on income including your savings interest.

Double check with your accountant, but I reckon that'll cost you no more than £325.
Leave a comment:
antuk started a topic Self Assessment - Bank Interest

27 December 2017, 12:04
Self Assessment - Bank Interest

Hi all,

Now that we are close to the SA deadline ive submitted my return but I don't really agree with the calculation, I was wondering what other peoples views are before i even attempt to query it

Like many people i expect I have taken dividends to the end of the basic rate band and was expecting a tax bill for just that, however the SA calc has taken the bank interest I earnt which is under the PSA (and not taxed it as its under the PSA) however its used that figure to push all the income figures to the right, so that my dividend now falls into the higher rate tax band by exactly the same as the interest amount earnt. Therefore although the interest was tax free the net result is that it makes the dividends more taxable.

Thoughts anyone?

Thanks,
Anthony
Tags: None