HMRC 'failing to tell taxpayers of key changes to savings taxes'

[davieG]

Most taxpayers are unaware of "important and imminent" changes to the way savings and dividends are taxed, because of poor HMRC communication, a House of Lords committee says.

The committee said the forthcoming changes were complex and confusing and had been poorly communicated.

It concluded that HMRC's communications strategy was "inadequate".

A key change is the abolition of the tax deduction scheme whereby banks deduct tax from most interest earned.

The committee said most taxpayers were unaware of the imminent change, and whether or not they may have to file a tax return and pay tax to HMRC on interest earned in future.

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The House of Lords Economic Affairs Committee is also concerned that the complexity of the tax system and compliance burden placed on individual taxpayers is growing.

It says the government must demonstrate how it is delivering a simpler tax system.

It also called for an effective strategy of communicating with taxpayers and a public awareness campaign led by HMRC in partnership with banks, building societies and other financial institutions.

Lord Hollick, the chairman of the committee, said: "Changes to how we are taxed can have a huge impact on financial planning, including savings and pension arrangements.

"A great many savers will have no idea that from April they may for the first time have to check whether they need to report or pay tax on interest they have received, rather than have their bank deduct the tax they owe."

[davieG]

Can't  understand why they've  changed this.

 

So if you now get  a small interest on a few quid you've  got to fill in a tax form.

 

Surely this means a whole lot more people having to complete an annual tax return and more  paper work for the hmrc?

[Jon the Hat]

Ridiculous.  Most people will ignore it, and HMRC wont have the resources to follow up.

[davieG]

Being retired I've not had to fill in a tax return for a few years my wife even longer I presume now we're  both going to have to fill one in to declare the interest I get from a few shares I hold as a result of a couple of companies I had deals with going public plus some minor bank interest.

 

 

[Babylon]

Can't understand why they've changed this.

So if you now get a small interest on a few quid you've got to fill in a tax form.

Surely this means a whole lot more people having to complete an annual tax return and more paper work for the hmrc?

Because the first 1000 in savings interested is now tax free for everyone. You need quite a chunk in the bank to be getting £1000 in interest, the way rates are at the moment.

Here's some more information http://www.moneysavingexpert.com/savings/personal-savings-allowance

[sphericalfox]

This thread is for Wymesy

 

Everyone else disregard. 

[DJ Barry Hammond]

Strange that there is nothing obvious about this on either the HMRC website or Money Advice Service. Given we're under a month to the change of the tax year, you'd think this is something they'd have in place (maybe published Monday).

It could be that they're banking on the private sector to get the message out for them I guess.