HMRC £5,000 charge hitting more people in new update

HMRC £5,000 charge hitting more people in new update A bank said there had been a 173 per cent increase in four years More and more people are facing a big charge from HMRC, according to new figures. The number of savers anticipated to pay £5,000 or more in income tax on their savings interest has climbed to 144,000 individuals, according to a Freedom of Information request by Paragon Bank. The FoI disclosed that HMRC was projecting this figure for the current tax year, representing a 173% surge over four years. The data reveals that 52,700 individuals faced a tax liability exceeding £5,000 on savings income during the 2022-23 tax year. This figure more than doubled to 117,000 in 2023-24, before climbing further to 133,000 in 2024-25 and 137,000 in 2025-26, with 144,000 forecast for 2026-27. 'Growing issue' Additionally, CACI data shows there are 1.1 million Instant Access adult non-ISA savings accounts holding balances of £100,000 or above, with a total value exceeding £260.7 billion. Many of these balances are likely generating hundreds, if not thousands, of pounds in tax, as they remain outside tax-free wrappers such as ISAs, Paragon noted. The data underscored how tax is "becoming a growing issue for savers with larger balances, particularly at a time when many people are holding substantial sums in cash and looking to make the most of competitive rates". 'Substantial bills' Andrew Wright, head of savings at Paragon Bank, commented: "These figures show that tax on savings is no longer an issue affecting just a small number of people. "As balances have grown and rates have remained relatively high, far more savers are now finding themselves with substantial tax bills on their interest. "With CACI data showing 1.1 million non-ISA savings accounts hold more than £100,000, it is clear there are a lot of people with larger balances who may need to think carefully about how their money is structured. "Reviewing your savings regularly, checking the rate you are earning, and making use of tax-efficient options where appropriate can help ensure more of your return stays in your pocket."