Do I need to self-report to IRS about my savings interest?

Can you tell me if I have to notify IRS regarding interest in earnings over the tax allowance - or will they react to the reporting notification by Hargreaves Lansdown? I am elderly. Interest was generated by money stashed in a savings account whilst awaiting home improvements to begin. Tried calling IRS but phone rings out.

In the UK, HMRC requires you to declare any interest from savings. The paperwork HL provides you with is for that purpose, so you could fill out the self-assessment form on the HMRC website. With tax-free thresholds frozen for years and interest rates being high in the last few years, more and more people need to pay tax on their interest savings. Not declaring this to HMRC could attract hefty fines.

Top tip – If you have large amounts of cash you are planning to spend in the next couple of years, consider putting it into a bond as that would attract tax–free interest. If you need more flexibility and don’t want to lock the funds away for a fixed period, consider if you could use some of your ISA allowance to keep cash where interest would accumulate tax-free. If you don’t spend it all, Cash ISAs from previous tax years could easily be moved into a Stocks & Shares ISA without losing the tax-free status. Over the long-term, your cash buying power would be eroded by inflation, so funds you are not planning on spending are best invested.