Self assessment and student loan

It is part of your taxable income, and can make a real difference if you

are on higher rate tax (and for some people who would never have had a student loan!)

HMRC add up all your income and work out how much tax is due, then look at how much tax you have already paid, including that paid by your bank,

and take that off the amount due.

Only if you want a tax audit and fine! The banks tell HMRC about the interest, and HMRC's shiny new computer system uses this to cross check against the tax returns.

Note, for some people, the tax due on the bank interest is less than the

amount paid by the bank, and if they fill in the tax form, or ask nicely

(there is a form for this), HMRC will pay it back. That is particularly

likely to happen for married women on just the state pension.

The bank interest section should include interest earned and tax paid in the approriate boxes.

That way the gross interest is added into your taxible income, and the tax paid is added to your PAYE payment and subtracted from the total tax liability.

At first glance it looked like HMRC were charging me tax on this income a second time since it was used to calculate the tax due total. But having a closer look I see they also work out the tax I would have paid and include that in my total.

HMRC seem to have charged me 25p for tax. I can't possibly owe any tax since every source of income has already been taxed. I can only guess it's because they rounded my earnings up and my tax paid down and I'm paying 25p on some non-existent £1 of earnings. I don't think I'm going to bother arguing about it though.

HMRC round in your favour (income dpwm, tax paid up). If you submitted online before the end of December, you should have been able to get the