In our newsletter on 25 January 2018 we outlined how HMRC were expecting to use the bank and building society reported figures of interest to populate P800 and PA302 (simple assessment) computations. These plans will continue for 2017/18, but HMRC will not pre-populate SA returns with the bank interest figures.
Taxpayers who are not within SA, but who are taxed under PAYE, will see their PAYE codes for 2018/19 adjusted for the amount of taxable interest received in 2017/18, assuming that the same amount will be received in 2018/19. However, this year HMRC will use figures from joint accounts as well as from sole accounts, splitting the joint interest on a 50:50 basis.
If the beneficial interest in the account is not held on a 50:50 basis, you or the taxpayer will have to inform HMRC. When providing any corrected figures to HMRC, be sure to include a breakdown of the total interest figures split between each individual account. The call-centre operative at HMRC may insist that only a total of all bank interest for the taxpayer is required, but this is not official HMRC policy.
Where the data for a particular account differs from that provided by a bank or building society, and the taxpayer can provide documentary evidence, HMRC will take the issue up with the bank or building society rather than expecting the taxpayer to do so. This can only happen if information has been provided by the taxpayer on an account by account basis.
Written by the Tax Advice Network