Non-taxpayer, tax free investments and volunteering

TMBH

This financial year 08-09 I have earnt well under my 603L tax code/limit and I have no more paid work for the foreseeable future.

I am planning to work as a volunteer for the remainder of the tax year followed my a full 12 month volunteer placement for 09/2010. Obviously I will not be earning anything during this period apart from a very small allowance of approximately £35 a week.

So I need to fill in a variety of R85 forms to confirm my non-taxpayer status and also claim back tax I have paid this financial year.

Does anyone have experience in doing this?
Are there disadvantages in changing your tax status?

I have a sum of money that I would like to invest (ISA is topped up). Inparticular I was looking at a NS&I Index-linked Savings Certificate. The interest is tax free but it says it may be unsuitable for non-taxpayers. OK the interest rate is not great but does it mean as a non-taxpayer I am not allowed to invest in it?

Any thoughts would be much apreciated.

Lokolo

Changing over is easy as pie. Most banks don't need an R85, you can ring up or whatever and tell them, or via the internet, and its done for you.

Claiming back tax can be either easy as pie, or annoying as crap. Sometimes it takes a while for the cheque to come but I found it an easy process.

You can buy them but they are unsuitable because you can get better deals elsewhere because you don't pay tax. Also I think they are tied up for a number of years, so if you need the money you are scrwed or something, not entirely sure.

jem16

TMBH wrote: »

Inparticular I was looking at a NS&I Index-linked Savings Certificate. The interest is tax free but it says it may be unsuitable for non-taxpayers. OK the interest rate is not great but does it mean as a non-taxpayer I am not allowed to invest in it?

You can still use them, it's just that the rate makes it more favourable for taxpayers,especially higher rate taxpayers.

Just remember that you need to keep the money in for at least a year to get any benefit.