With savings rates higher than they’ve been for years, many people are now earning more interest than expected. That’s why the question do i have to notify HMRC of savings interest? is coming up so often.

This guide explains, Do I have to notify HMRC of savings interest?, when HMRC handles it automatically, when you need to step in, and how to avoid an unexpected tax bill.

Do I have to notify HMRC of savings interest in the UK?

In most cases, you don’t actively notify HMRC about savings interest. Banks and building societies usually report the interest you earn to HMRC after the end of the tax year. If tax is due, HMRC will normally collect it by

• Adjusting your PAYE tax code, or
• Sending you a Simple Assessment bill.

However, you’re still responsible for making sure the right tax is paid. A sensible rule of thumb is: if you know you’ve gone over your tax-free savings allowance and you haven’t heard anything by the end of the following tax year, it’s worth checking and contacting HMRC so you don’t get hit with an underpayment later.

What counts as savings interest for HMRC purposes?

Bank and building society accounts (most common)

Interest from easy-access savings accounts, fixed-rate bonds, regular savers, and similar products usually counts as savings interest.

NS&I and other providers

Interest-paying National Savings products and other savings providers can also count (depending on the product).

What’s usually tax-free

Interest earned inside a Cash ISA or other ISA is tax-free and does not count towards your savings allowances.

Do banks tell HMRC about savings interest automatically?

Often, yes. Most savings providers report interest to HMRC, and HMRC uses that information to calculate any tax due.

But reporting and matching isn’t always perfect (for example, delays or mismatches can happen), so it’s still smart to keep your own totals and sanity-check anything HMRC sends you.

How much savings interest is tax-free? (Personal Savings Allowance)

Your Personal Savings Allowance (PSA) depends on your Income Tax band.

Income Tax band	Personal Savings Allowance (PSA)	What happens above the PSA
Basic rate taxpayer	£1,000	Interest above PSA is taxed at your marginal rate
Higher rate taxpayer	£500	Interest above PSA is taxed at your marginal rate
Additional rate taxpayer	£0	All non-ISA interest is taxable

Some people may also qualify for the “starting rate for savings” (a separate 0% band that can apply if your non-savings income is low). This is one reason two people earning the same interest can have different tax outcomes.

If you’re on PAYE, do you need to tell HMRC about savings interest?

When HMRC usually handles it without you

If you’re employed or receive a pension (PAYE), HMRC often collects any tax due automatically by changing your tax code after receiving savings interest data.

When you should proactively contact HMRC

You should consider contacting HMRC if:

• You’re confident you’ve exceeded your PSA, and you haven’t received a tax code change, letter, or bill later on.
• Your tax code changes and clearly looks wrong (for example, it assumes ongoing interest you won’t get this year).

Here’s what you can do next: check your total interest early, compare it to your PSA, and review your tax code if anything looks off.

When do you need Self Assessment for savings interest?

If you already file Self Assessment

If you’re already in Self Assessment (common for sole traders, landlords, and some company directors), you’ll usually include your savings interest in your tax return.

If you’re not normally in Self Assessment

Some people may need to register and file a return if their savings and investment income is high enough (a commonly referenced trigger is £10,000+ of savings and investment income). If you’re unsure, it’s worth checking guidance or speaking to an accountant, especially if you have multiple income streams.

What is a Simple Assessment letter, and how does it relate to savings interest?

A Simple Assessment is a tax bill HMRC can send when tax can’t be collected automatically through PAYE, and you don’t complete a Self Assessment tax return. Savings interest is a common trigger.

If you receive one, check it carefully. If the figures don’t match your records (for example, the interest total looks too high), challenge it quickly so you’re not paying the wrong amount.

How to work out your total interest (especially across multiple accounts)

The easiest way is to use each provider’s annual interest summary (often called an annual interest statement or tax certificate) and total everything for the tax year (6 April to 5 April).

Where you’ll usually find it	What to look for	Why it matters
Online banking/app	Annual interest/tax certificate/interest summary	HMRC uses tax-year totals, not calendar-year totals
Statements	Interest credited and dates	Useful for cross-checking HMRC figures
Your own tracker	Totals across all accounts	Stops “oops” moments when you have multiple accounts

Joint accounts are often treated as split 50/50 between holders unless you can evidence a different beneficial ownership arrangement.

What happens if you don’t notify HMRC and you owed tax?

Common outcomes include:

• HMRC adjusting your tax code to recover the tax.
• A Simple Assessment bill arriving later.
• Interest or penalties if the underpayment goes unresolved.

The safest approach is simple: once you know you’re over your allowance, don’t ignore it.

SME-focused scenarios (quick decision guide)

Scenario	Do you normally “notify” HMRC?	What usually happens
Company director on PAYE (no Self Assessment)	Often no, but act if HMRC hasn’t contacted you	PAYE code change or Simple Assessment
Sole trader already filing Self Assessment	You declare it in your return	Handled via Self Assessment
Higher-rate taxpayer with cash across multiple accounts	Often no “notification”, but double-check totals	HMRC may code it; you must correct errors

Practical checklist: what to do next

• Work out your total non-ISA interest for the tax year.
• Compare it to your Personal Savings Allowance.
• Check whether your tax code has changed or a bill has been issued.
• If you’re over the allowance and haven’t heard from HMRC, contact them.
• If your savings or investment income is high, check whether Self Assessment applies.

Here’s what you can do next: review your interest totals now, rather than waiting for a surprise later.

How people talk about this online

Paying tax on Savings Account Interest
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Final summary

For most people, there’s no need to proactively notify HMRC about savings interest; HMRC often receives the information from providers and collects any tax through your PAYE tax code or a bill.

But if you’ve exceeded your allowances and nothing seems to be happening, don’t ignore it. Keep your own totals, review any tax code changes, and act quickly if HMRC’s figures don’t match your records.

And to answer it clearly one last time: Do I have to notify HMRC of savings interest? Usually, no, but you must make sure the right tax is paid.

FAQs

Do I need to report savings interest if it’s under the Personal Savings Allowance?

Usually no, but keep your records in case HMRC’s figures don’t match yours.

Will HMRC automatically know my savings interest?

Often yes, but not always. Keep your own totals and challenge anything that looks wrong.

Do I need to tell HMRC about ISA interest?

No. ISA interest is tax-free.

How do I declare savings interest if I don’t do Self Assessment?

HMRC will normally collect any tax due via your tax code or by sending a Simple Assessment bill.

Can HMRC change my tax code because of savings interest?

Yes, this is a common way HMRC collects tax due on savings interest for people on PAYE.

Author expertise note

This article is written for UK SME readers who want a practical decision path: work out your interest total, compare it to the PSA, then decide whether you’re likely to see a PAYE code change, a Simple Assessment, or whether Self Assessment is more appropriate given your wider tax position.