Anna’s Accountancy Alerts – Week 23 (4th – 10th September 2023)

Tax

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HMRC increase late payment interest rate

Late payment interest is payable on late tax bills covering income tax, national insurance contributions (NICs), Capital Gains Tax (CGT), corporation tax pay and file, Stamp Duty Land Tax (SDLT), stamp duty and stamp duty reserve tax.

Repayment interest was also increased from the current 3.5% rate to 4%.

Child Trust Funds still unclaimed

The Parliament’s Public Accounts Committee (PAC) said over £1.7 billion is waiting to be claimed by a million young adults, at an average value of £1,900 each.

According to the PAC, many young adults don’t know about their savings or have lost track of them. It found that Child Trust funds (CTF) providers are charging fees for passively managing accounts but are not doing enough to link these accounts to their owners.

Internet link: Parliament website

Increase in tax on savers

In the 2023-24 tax year it is estimated that over 2.7 million individuals will pay tax on cash interest, up by a million in a single year, revealed analysis of HMRC figures by investment platform AJ Bell. In 2020-21 only 800,000 people paid tax on savings.

Individuals pay tax on interest they earn on cash savings that exceeds the personal savings allowance, which currently stands at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers get no exemption and pay tax on all cash interest they receive.

Tax bills are paid either through self-assessment or deducted from income through a tax code adjustment. Many will not be aware that they owe the tax until HMRC sends them a letter informing them about a change to their tax code which means the money will be deducted through PAYE earnings.

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