Question about paying tax on savings interest

[houseandgardenias]

I have £40k leftover from my house sale. I'm about to put it into a high interest savings account - but I'm unsure about the tax side of interest on savings.

I've never declared tax to hmrc or anything, I've just worked for an employer and received my salary every month.

So I'm wondering would I have to do anything about paying tax on savings? Or just sit back and it would get deducted automatically by the bank?

I really don't know- but am keen to put my savings somewhere better than they currently are asap. Currently earning 0.5% interest!!

Here’s a helpful guide: https://www.moneyhelper.org.uk/en/savings/types-of-savings/tax-on-savings-and-investments

Isa is tax free! As are premium bonds 50k max

You can put 20k per year and not pay any tax on interest earned.

You only pay tax on interest over £1000 per year in any other accounts

If in a taxable account, say at 4% interest then you are looking at £1600 of interest in a year.

If you are a lower rate tax payer, you likely have £1000 savings interest allowance, so would be tax on £600, likely at 20%, so £120 of tax.

If you complete a tax return you pay the tax via that. Otherwise I think HMRC adjust your tax code the following tax year.

This guide may help:
www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me#toc-what-tax-rates-apply-to-my-savings-income-

Thanks for your quick replies- I'd read the money saving expert advice but still wasn't totally clear if I had to actually do anything.

Do you think it's as simple as my tax code gets changed?

I don't file a tax return so was unclear if I had to start doing that if I had savings.

Yes I've got an isa at the moment- but that's also on 0.5% so I'm thinking I need to change that too.

Then I'll put the max into that and the rest into the high interest savings

"If you’re employed or get a pension, HMRC will change your tax code so you pay the tax automatically. To decide your tax code, HMRC will estimate how much interest you’ll get in the current year by looking at how much you got the previous year."
It's what they say, so I would just wait for it to happen... if you do get to the stage of having taxable interest - as you may move it to tax free places before that happens.
https://www.gov.uk/apply-tax-free-interest-on-savings