Latest news with #RevenueandCustoms
Daily Mirror
5 hours ago
- Business
- Daily Mirror
HMRC sends letters out to people with £3,500 or more in their savings account
HMRC is currently sending out letters to everyone who has a savings account and has earned more than £500 in interest over the last financial year Brits with savings of £3,500 or more are being warned they could be hit with an unexpected tax bill from His Majesty's Revenue and Customs (HMRC). HMRC has the ability to automatically detect interest on savings generated by your bank account and if you exceed a certain limit, you will automatically receive a notice of an additional tax bill. With the new tax year 2025-26 having kicked off in the past month, the taxman has been busy dispatching letters to individuals urging them to register for self-assessment or requesting them to pay extra tax. Now that your entire previous financial year is wrapped up, HMRC is currently evaluating people's final situations and issuing tax bills to those who it determines owe money in tax on savings accounts. Such data is automatically reported to the taxman by your bank unless it is in a Cash ISA, which is shielded from tax. The Personal Savings Allowance allows you to earn £1,000 per year in savings interest without being taxed on it, but this only applies to people earning less than £50,270. If you earn £50,271 or more, your Personal Savings Allowance is reduced to just £500. And if you earn £125,000, your Personal Savings Allowance plummets to £0, reports the Express. The precise amount you will owe depends on how much you earn, how much interest you received, and when it was paid out. Stashing your savings into a fixed account could leave you facing a hefty tax bill, with experts cautioning that you might be hit by HMRC demands having accumulated as little as £3,500 in savings after tying it up for three years. The catch lies in the fact that interest on fixed accounts is paid out in a lump sum, meaning all the interest is considered for one tax year at once. If you tuck away £3,500 into a 5% fixed savings account for a trio of years, you're on track to collect upwards of £500 interest. Fixed accounts mean the interest gets locked in - or "crystallised" - as soon as it's paid, so after three years, you're handed the full amount. With the whole £500+ interest landing in your lap simultaneously, say goodbye to your £500 Personal Savings Allowance and brace for a nudge from the taxman. For those raking in higher wages, the sting bites harder – coughing up 40% on every quid past £500, not merely 20%. Dip just £100 beyond your allowance, and it'll cost you a tidy £40. And if you're sitting pretty with heftier sums in savings, even an easy-access account might breach the threshold. Pop £11,000 into an account at 5% for a year, and you'd snag £550 interest, sneaking over the limit and potentially nudging you into owing tax, especially if your earnings are above the £50,270 mark. Even those earning under £50,270 could owe HMRC money if they accumulate over £1,000 in interest from savings, as you'd break the threshold with an interest of £1,050 on savings of £21,000 at a 5% rate. Multiple sources of income are considered in your Personal Savings Allowance. The Government explains the process, stating: "If you're employed or get a pension, HMRC will change your tax code so you pay the tax automatically. "To decide your tax code, HMRC will estimate how much interest you'll get in the current year by looking at how much you got the previous year."
Mint
4 days ago
- Business
- Mint
Organized Crime Phishing Took £47 Million From UK Coffers
Organized crime has extracted £47 million from the UK government in a phishing operation, His Majesty's Revenue and Customs officials said operation, which took place last year, involved mimicking taxpayer credentials and claiming payments from HMRC, Angela MacDonald, second permanent secretary and deputy chief executive, told Parliament's Treasury Committee. The incident wasn't a cyberattack and no data from taxpayers was taken, she said. 'That is a lot of money and is very unacceptable,' MacDonald said. The Treasury Committee learned of the incident during a hearing, after asking the HMRC officials about a statement released earlier in the day that said the tax authority had shut down accounts after detecting 'unauthorised access.' HMRC is trying to contact 100,000 people whose accounts have been affected, John-Paul Marks, HMRC first secretary and chief executive, told the committee. Authorities began a criminal investigation that included going outside the UK after HMRC detected the operation in 2024, and arrests have since been made, he said. 'This incident is constrained, it is under control,' he said. The affected accounts are Pay-As-You-Earn, or PAYE, accounts, used by employers to hold employee tax and national insurance payments, Marks said. The entities behind the operation created new PAYE accounts and accessed existing ones to get a repayment from HMRC, he said. Banks have also been affected by the operation to use HMRC's identity information, Marks said. Customers initially contacted HMRC after noticing anomalies in their accounts, Marks said. The tax authority has shut down fake accounts and removed false information as part of its response, he said. The £47 million was taken through three separate payments, MacDonald said. HMRC was able to protect £1.9 million that was sought by the entities behind the operation, she said. To contact the reporter on this story: James Munson in Toronto at correspondents@ contact the editors responsible for this story: Kathy Larsen at klarsen@ Rose Walker at rwalker1@ This article was generated from an automated news agency feed without modifications to text.
Yahoo
27-05-2025
- Business
- Yahoo
HMRC plans for tax raid on pensions
Millions of pension savers are at risk of a stealth tax raid under Rachel Reeves after officials launched an inquiry into workplace retirement schemes. His Majesty's Revenue and Customs (HMRC) is exploring a shake-up of the salary sacrifice systems used by employees at around half of British companies. The money could be used to plug the black hole in the public finances, estimated at tens of billions of pounds, left by the Chancellor's October Budget and tariffs by Donald Trump. But the reforms could cost the average earner more than £500 a year in extra income tax and National Insurance, significantly reducing the size of their pension pot. The National Institute of Economic and Social Research (NIESR) think tank warned on Tuesday that the Chancellor could have to raise taxes by up to £30bn in the autumn Budget to fund benefit giveaways and the rising cost of borrowing. Labour MPs are calling on the Government to relax its fiscal rules, which say that debt must be projected to fall as a percentage of GDP in five years' time. They have also called for reversals of Sir Keir Starmer's planned cut in benefits. The Prime Minister has already changed course on planned cuts to the winter fuel allowance, and may also scrap the two-child benefit limit, which would cost £2.5bn a year. Sir Steve Webb, the former pensions minister, said HMRC's consultation put a potential tax raid 'firmly on the agenda', while Jonathan Watts-Lay, a financial wellbeing specialist, said it would cause people pain either 'now or in retirement'. The warnings come after it emerged that higher earners were increasingly using salary sacrifice to stuff their pensions and avoid tax 'cliff edges'. Salary sacrifice allows an employee to voluntarily give up part of their earnings in order to avoid paying income tax and National Insurance on that portion. The Government is thought to be considering taxes on the wealthy ahead of this year's Budget, when the cost of tax rises last year will be laid bare by the UK's fiscal watchdog. As many as half of businesses offer a salary sacrifice scheme as a method of making pension contributions, which can provide workers with substantial savings and boost their retirement pots. The documents, published by HMRC, showed that 51 firms, 41 of which already offered a scheme, were consulted on three possible changes to salary sacrifice. Under one of the proposals, income tax and National Insurance relief would be removed. Someone earning £35,000 a year and paying 5pc into their pension would lose £560 a year in total, while it would cost their employer £241 more. A second option proposed removing only National Insurance relief, costing the employee £210 and their employer £241. In the third option, where National Insurance relief would be removed on any amount sacrificed over £2,000, the report said someone earning £45,000 would lose £30 a year and employers would spend another £34. Employers viewed each option negatively, with some seeing the removal of both types of relief as a threat to salary sacrifice itself. They are also likely to be unpopular with the public, after a series of raids on the better-off, including through increases in inheritance tax, capital gains tax and VAT on private school fees. As a backbencher, Ms Reeves campaigned to reduce all pensions tax relief to a flat rate of 33pc. Sir Steve, now of consultants LCP, said it was 'very revealing' that HMRC had paid for research into the response of employers. He said: 'Although the research was commissioned under the previous government, the desire to raise additional revenue is, if anything, even more acute today. 'With a chancellor reportedly looking to make up a multibillion-pound hole in the public finances in her autumn Budget, this research suggests that changes to salary sacrifice are firmly on the agenda, and likely to be considered as a potential revenue-raising measure.' Mr Watts-Lay, of financial wellbeing and retirement specialists Wealth at Work, said the move was a 'stealth tax'. He said: 'It would be bad for everyone. Whether they just do National Insurance or National Insurance and income tax, the fundamental of all those scenarios is that [people] have less money going into their pension unless they up their contributions. 'You're basically saying to someone you either need to pay more money, or you carry on and your pot will be smaller when you get to retirement. 'There's no positive impact of it. They either take the pain, or they take the pain when they get to retirement.' Experts this week warned that Labour's pledge to restore many pensioners' winter fuel payments and review the two-child benefit cap had piled more pressure on the Chancellor to raise more money. Stephen Millard, of the NIESR, said Ms Reeves could be forced to break a manifesto pledge not to increase income tax, National Insurance or VAT as the amount she was forced to raise hit between £10bn and £30bn. The number of people earning just under £100,000 is also rising as people look to restrict their earnings with four-day weeks, more holidays and higher pension contributions. Currently, earning over that amount can lead to someone paying an effective income tax rate of 60pc and losing their entitlement to free childcare. A Treasury spokesman said: 'These claims are totally speculative. HMRC regularly commissions independent research on all aspects of the tax system. 'We are committed to keeping taxes for working people as low as possible.' Sign in to access your portfolio
North Wales Live
23-05-2025
- Business
- North Wales Live
HMRC sending £104 into UK bank accounts today
UK households claiming Child Benefit are set to receive a financial boost this month due to new payment rates, with some expected to receive their funds as early as Friday (May 23). Child Benefit is distributed by His Majesty's Revenue and Customs (HMRC) to qualifying parents or guardians responsible for a child under 16, or under 20 if they remain in approved education or training. Only one person can claim the benefit for a child, but there is no limit on the number of children you can claim for. The scheme provides an allowance for each child, paid every four weeks, and also grants National Insurance credits that contribute towards your State Pension. Child Benefit rates were increased in April at the beginning of the new tax year, resulting in slightly higher monthly payments for claimants. Under the revised rates, recipients will receive £26.05 per week for one child - equating to £1,354.60 annually - and each additional child gets £17.25 per week. Therefore, families with two children will receive £2,251.60 per annum, while those with three children will receive £3,148 annually. However, there is no upper limit - aside from the Benefit Cap - meaning families with four, five or more children could receive even more than £3,148, with an extra £897 allocated for each additional child. Child Benefit, paid by HMRC, typically lands in parents' accounts every four weeks on a Monday or Tuesday. Families with one child receive £104.20 each month, while parents of additional children receive £69 monthly, reports the Express. However, payment dates are adjusted when they fall on a bank holiday. For money-saving tips, HMRC said: "Child Benefit is usually paid every 4 weeks on a Monday or Tuesday. There are different payment dates if it's due on a bank holiday." "You can work out when you're next going to get Child Benefit by counting 4 weeks forward from your last payment. Do not count forward if your payment was due on a bank holiday - the dates are different." Additionally, HMRC cautions: "Your payment might be delayed if the bank is closed for a public holiday on the day HM Revenue and Customs (HMRC) pays you. Check with your bank for the date you'll get your payment."
Wales Online
23-05-2025
- Business
- Wales Online
HMRC sending £104 into UK bank accounts today
HMRC sending £104 into UK bank accounts today Households claiming a HMRC benefit will get some extra cash thanks to the new payment rates Some parents may receive a boost in their bank accounts today (Image: undefined via Getty Images ) UK households claiming Child Benefit are set to receive a financial boost this month due to new payment rates, with some expected to receive their funds as early as Friday (May 23). Child Benefit is distributed by His Majesty's Revenue and Customs (HMRC) to qualifying parents or guardians responsible for a child under 16, or under 20 if they remain in approved education or training. Only one person can claim the benefit for a child, but there is no limit on the number of children you can claim for. The scheme provides an allowance for each child, paid every four weeks, and also grants National Insurance credits that contribute towards your State Pension. Child Benefit rates were increased in April at the beginning of the new tax year, resulting in slightly higher monthly payments for claimants. Under the revised rates, recipients will receive £26.05 per week for one child - equating to £1,354.60 annually - and each additional child gets £17.25 per week. Therefore, families with two children will receive £2,251.60 per annum, while those with three children will receive £3,148 annually. However, there is no upper limit - aside from the Benefit Cap - meaning families with four, five or more children could receive even more than £3,148, with an extra £897 allocated for each additional child. Child Benefit, paid by HMRC, typically lands in parents' accounts every four weeks on a Monday or Tuesday. Families with one child receive £104.20 each month, while parents of additional children receive £69 monthly, reports the Express. Article continues below However, payment dates are adjusted when they fall on a bank holiday. For money-saving tips, sign up to our Money newsletter here HMRC said: "Child Benefit is usually paid every 4 weeks on a Monday or Tuesday. There are different payment dates if it's due on a bank holiday." "You can work out when you're next going to get Child Benefit by counting 4 weeks forward from your last payment. Do not count forward if your payment was due on a bank holiday - the dates are different." Article continues below Additionally, HMRC cautions: "Your payment might be delayed if the bank is closed for a public holiday on the day HM Revenue and Customs (HMRC) pays you. Check with your bank for the date you'll get your payment."
