Answers · UK 2025/26
How does HMRC find out about my savings interest?
Banks and building societies are legally required to report interest paid to HMRC automatically each year, so HMRC knows about your savings interest without you needing to declare it proactively in most cases.
Full answer
Under UK regulations, all UK banks and building societies must report to HMRC annually the total interest paid to each customer. HMRC then cross-references this with your Personal Savings Allowance: £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and nil for additional-rate taxpayers. If your interest exceeds your allowance, HMRC will usually collect the tax by adjusting your PAYE tax code or by sending a simple assessment. If you are not in PAYE, for example if you are self-employed or retired, you must declare savings interest over the allowance on a Self Assessment tax return. Interest from ISAs is always tax-free and does not count towards your Personal Savings Allowance or need to be declared.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.