For those who manage their own taxes, covering everything in a Self-Assessment return can be stressful.
As rules and regulations change, it is not always clear what should be reported and the risk of penalties from underreporting cannot be dismissed.
HMRC have now clarified their stance on bank and building society interest, so it is worth ensuring that you comply with the updated guidance.
What has HMRC changed with bank and building society interest?
Starting in October 2025, HMRC have been sending out Simple Assessment letters to individuals who could be at risk of not paying the tax that they owe on interest accrued from bank and building society accounts in the previous tax year.
You may have already found yourself receiving a letter and if you were confused as to why, then we can help you understand it.
If your letter has not yet arrived, then keep an eye out for it.
The letters are helpful as they highlight and clarify the exact amount of tax owed on the interest during the 2024/25 tax year, as well as provide an explanation of why you owe the figure and guidance on how to pay it.
In instances where your bank or building society has provided updated information to the tax authority that includes any accrued interest, you may receive another letter from HMRC outlining your updated tax liabilities.
You may have already made a payment based on the first letter you received, but you will still need to make additional payments if it is required.
Every year, your bank and building society report the interest you receive to HMRC, so this is when your tax obligations will be noticed and adjusted.
What do I do if the figures don’t match?
If the figures from your tax code and bank statements do not match, then this might not necessarily be a cause for concern.
A number of factors can affect whether your interest is considered for tax purposes.
This is because some interest on your personal savings can be tax-free and only taxable interest is included in your tax code.
When preparing assessments, HMRC may be estimating figures based on the data available to them, so these may change as information updates.
If you feel that the letter is erroneous, then you can contact HMRC directly to dispute the letter, but this must be done within 60 days of receiving the letter.
Our team can help you understand the Simple Assessment that you have received so that you know whether you need to pay a tax bill or if it is worth disputing.
Alongside this, we can support you on a range of personal tax issues to ensure that you are compliant, no matter how regulations may change.
To take the stress out of personal tax management, speak to our team today.
