HMRC is set to send out more letters with tax bills (Image: Getty)
Thousands of people with savings accounts are set to be hit with a shock tax bill from after a delay on sending out letters.
His Majesty’s Revenue and Customs normally sends out P800 letters, informing people that they owe extra tax on their savings, by the end of November.
But now has revealed it has extended the timeframe for issuing the letters until the end of March 2025, following an increase in the number of accounts reporting savings to the taxman.
Banks automatically inform about the amount of interest they have paid out on savings.
A basic rate taxpayer can earn £1,000 of interest in a single year before they are liable to pay tax on it.
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But someone earning £50,000 or more would only be allowed to earn £500 of interest before they need to pay tax.
With savings rates hitting 4-6% on many accounts in the past 12 months, you would only need about £20,000 of savings if you’re a basic rate taxpayer or £10,000 if you’re a higher rate taxpayer to go over your Personal Allowance and owe tax, on a 5% savings account.
When this happens, the information reported by your bank to would trigger the taxman to issue a P800 notice. Usually, this would be collected by a change of tax code on your PAYE earnings, and would see 20% of the interest taken from you.
Now that the timeframe has been extended, many more savers could still expect a tax bill to drop onto their doorstep.
says about the tax notices: “At the end of each tax year, send customers an End of Year Tax Calculation – P800 if they have under or overpaid their taxes. This personalised letter indicates whether the recipient needs to pay more tax or is eligible for a refund, the amount involved and how the payment or refund will be made.
“It also provides a more detailed breakdown of the tax calculations to help them understand how have come to the relevant conclusions and figures. In most cases, customers do not need to contact after they receive a P800. Customers are asked to contact , if there is an error.”