Now the 2023-24 tax year is closed. The tax return filing deadline has passed.

HMRC has been able to review the full savings tax liability situation and compare it to the information it receives directly from the banks and building societies detailing the amount of interest paid to their individual account holders.

The latest figures from HMRC show that a total of 1.17m taxpayers already have income tax liabilities on savings income for the 2022-23 year. With increasing interest rates, similar rate bands and frozen allowances, this number will be going up.

Around 500,000 basic rate taxpayers paid tax on their savings interest in 2022/23, having exceeded the £1,000 personal savings allowance (PSA). Higher rate taxpayers can only earn £500 interest tax free a year. There is no savings allowance for the highest earners.

Had the personal saving allowance risen in line with inflation, the £1,000 figure would now be £1,360, and the £500 would be £681.

It is expected that over 2 million people will face a tax charge on their savings in the current tax year.

While those filling out a self-assessment tax return will declare any savings interest, or at least they should, and subsequent tax due, those taxed under PAYE get any tax liability calculated by HMRC, based on information sent to them by banks and building societies.

But at the end of the day, it is your responsibility to pay the right amount of tax, and if you want to avoid that brown envelope coming through your door, you need to ensure that all your savings income is properly declared.