HMRC Starts Issuing Tax Notices on Bank Interest: What You Need to Know

In October 2026, HM Revenue and Customs (HMRC) is starting to issue additional tax calculations to people who owe tax on interest earned from bank and building society accounts between 6 April 2025 and 5 April 2026. Notices may arrive as P800 tax calculations or Simple Assessment notices (PA302). This is part of HMRC’s regular process of using information supplied by financial institutions to determine taxpayers’ outstanding tax liabilities.

Some taxpayers have already received a Simple Assessment for the 2025–26 tax year that did not include their bank interest. If HMRC receives this information later, a second notice may be issued. It will show the total tax owed for the year, including the amount stated in the earlier notice, even if that amount has already been paid. To calculate the remaining balance, taxpayers should deduct any payments they have already made.

Not everyone who earns bank interest will have additional tax to pay. Depending on their income and tax band, they may qualify for the Personal Savings Allowance — up to £1,000 of interest tax-free each year for basic-rate taxpayers and up to £500 for higher-rate taxpayers. Additional-rate taxpayers do not receive this allowance. If the tax can be collected through PAYE, HMRC will usually adjust the taxpayer’s tax code. If this is not possible, or the underpayment exceeds £3,000, the taxpayer may receive a Simple Assessment explaining the amount due and how to pay it.

If you receive a notice from HMRC, check the figures, tax year and name of the bank or financial institution shown. If you believe a Simple Assessment is incorrect, you must contact HMRC within 60 days of the date of the letter. If your income from savings and investments exceeds £10,000, you may need to complete a Self Assessment tax return. Capital Accountants can help you understand your HMRC notice, review your tax position and determine the appropriate next steps.