Another aspect (as you say within the maths) is that when the yield was much lower than now, the 2 x £1m prizes were still being given out.
Discriminate, meaning: ‘To make a clear distinction; distinguish’.
My point was not whether the investment limit of £50K is good or bad.
My point was simply that the two groups of people get treated differently, which is a form of discrimination.
The same way that if you can discriminate between the colours green and red you are able to see that they are different.
Of course this also applies to all bank accounts that have investment limits.
Please point out something I wrote that shows a misunderstanding.
I started this thread in case it would be of use to anyone who may inadvertently exceed their personal savings allowance. Please can we keep things relevant to that. Thanks.
I think the merits or otherwise of tax free investments such as Premium Bonds is highly relevant for those that exceed their personal savings allowance.
But it’s your thread…
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Indeed. It’s the arguing about whether they are discriminatory that isn’t!
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I am beginning to wish I had never mentioned Premium Bonds. Pretend I never brought them up.
Good thread HH.
I’ve been aware of this for some time but this is the first tax year I’ll likely need to declare investment income that’s in excess of the tax free allowance. Roughly two thirds of my savings are held in ISAs and NS&I tax free bonds, the remainder is easy(ish) access accounts, and it’s here that taxable interest should be declared. I say should, because I’d be surprised if HMRC have a clue about any PAYE individual’s savings and interest earned. Anyway, I intend to be a good citizen and declare any taxable income. It can easily be done online at Gov.uk on the ‘check your income tax’ page, by clicking ‘add missing investment income’.
I’d be surprised if a bank etc would just hand over a large sum of interest. I suspect they’d deduct tax from interest and let the Inland Revenue refund if applicable. That’s what happens if you cash in a pension pot.
Interest on savings is paid gross. So even if you had £100,000 in an account and received £5,000 of interest, it wouldn’t be taxed.
It’s worth keeping an eye on your tax code: last year Mrs HH received a few hundred in interest and then got a big tax bill; the bank had erroneously told HMRC that she’d received over £10,000! They quickly put it right, but these things can happen.
Banks and Building Societies won’t collect the tax and their account fact sheets usually make clear it’s the responsibility of the account holder to declare any taxable income. AFAIK there’s no onus on the banks to pass on any such information to HMRC.
It appears Mrs HH’s bank told HMRC about her interest.
It most certainly did.
Yeh but erroneously. Someone needs to test this out! Who’s going to do it ?
I believe you are wrong on that, and that banks do notify HMRC. It would be odd if they didn’t, and an open invitation to tax fraud.
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Possibly, but why then do both banks and HMRC tell us to declare taxable interest. Why not tell us to simply wait for them to work it out on our behalf and tax accordingly?
When all interest was taxed, Santander would deduct interest and give it to HMRC. It was up the person being taxed, to claim it back, within six years if my memory is correct.
There is no way for a bank or other institution to work out what tax is due on the income on an account. It depends entirely on the individual’s circumstances.
That’s right and I remember helping my mum to claim it back. But of course all the bank did was tax at basic rate and leave it to the individual to claim it back or pay the additional task due. For whatever reason the system was changed.
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