Overview
- HMRC is currently issuing revised tax codes to individuals identified through bank-reported savings interest or other changes in circumstances.
- Employees and pensioners will see PAYE or pension payments adjusted so any tax due on savings interest is taken automatically.
- Banks and building societies report customers’ non-ISA interest to HMRC at the end of the tax year, which can lead to mid-year code changes when new data is processed.
- The tax-free savings allowance depends on income, typically £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and none for those earning £125,000 or more.
- HMRC will send a tax calculation letter explaining any underpayment or refund and how to settle amounts due.