HMRC begins using savings interest data to update tax codes
30 November 2017
HMRC has begun using 2016-17 savings interest data received from third party bank and building society savings interest (BBSI) to update tax codes.
The BBSI data will be used to populate interest for the 2016-17 tax year and estimate interest in the 2017-18 tax year.
Most people will no longer pay tax on savings interest due to the changes to the Personal Savings Allowance which came into effect in April 2016; basic rate taxpayers can earn up to £1,000 in savings income tax-free and higher rate taxpayers can earn up to £500. However HMRC has already contacted customers that are affected by these changes to explain how the new system will work.
Rigorous testing has taken place and HMRC has now confirmed that the system is going live with the first calculations and tax codes anticipated to be received by customers by 1 December 2017, with numbers increasing from the following week.
It is important to note that this is applicable to single/sole bank or building society accounts only. Customers who are in Self Assessment are not affected and should report their interest in the normal way.
HMRC has said that staff have been trained to support customers should they call for assistance. The Personal Tax Account (PTA) has also been updated to support customers with the change and GOV.UK will also be updated.