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Thousands of UK households are being left "bewildered" by a tax letter from HMRC - which threatens to double bill them. Savers in England face overpaying tax after HMRC sent out multiple demands for payment, the Telegraph reports. The newspaper reports how HMRC sent tax bills to households earlier this year that did not include any tax owed on savings interest paid by banks and building societies. Some savers were then sent a second “simple assessment” tax demand for 2024-25 that included tax owed on savings interest, plus the amount from the first letter. The gaffe comes despite UK households having already paid the taxman. READ MORE Thousands of Blue Badge holders issued update over free bus travel Joseph Adunse, of tax advisers Moore Kingston Smith, said there was a “real danger” that recipients of a second tax demand would “panic” and pay the full amount without realising they don’t owe any, or all, of it. “In the rush to collect as much tax as possible, HMRC has been sending several simple assessment letters to bewildered taxpayers," Adunse told the broadsheet. Speaking out on Monday (October 27), Adunse added: “The problem is that the agency has bypassed its vast data warehouse and is sending affected taxpayers a total tax bill including tax that was demanded in an earlier letter.” Your allowances for earning interest before you have to pay tax on it include your Personal Allowance, starting rate for savings and Personal Savings Allowance. You get these allowances each tax year (6 April to 5 April). How much you get depends on your other income, according to tax authority guidance. You may also get up to £5,000 of interest and not have to pay tax on it. This is your starting rate for savings. The more you earn from other income (for example your wages or pension), the less your starting rate for savings will be.
