Some taxpayers may notice a change in their affairs. HMRC has announced it is planning to use data received from banks and buildings societies to update tax calculations for 2016/17 and to update tax codes for 2017/18.
In your circumstance, HMRC is likely to have used the interest you received in 2016/17 as an estimate to adjust your tax code for 2017/18.
At the moment, HMRC only have the ability to do this for sole accounts only; not joint accounts.
If you’re self employed, the change should not have a big impact because you will report the bank interest on your tax return as normal and settle your tax liability at the normal July and January payment dates.
If you’re employed or in receipt of a pension, you may see a higher amount of tax taken from your income but many people will be eligible for the Personal Savings Allowance. For basic rate taxpayers, the Allowance is £1,000 and for higher rate taxpayers, £500.
You should always check your tax code or tax calculations. If you spot an error or you believe your actual income will differ significantly to the adjustment to your tax code, you should contact HMRC.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.