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Do I have to pay tax on my savings?

I am currently not working. Can I receive the interest on my savings gross and if so, how do I go about it? What are the rules?

Advice welcome - thanks.

Comments

  • deemy2004
    deemy2004 Posts: 6,201 Forumite
    You have an annual tax free allowance of 4745 per TAX year (4845 next year).

    So if your gross earnings for the current tax year (income & interest) is less than this then you can register to get your interest without the 20% tax taken off by filling in form R85. Ask your bank or svaings institute and they should give you one.

    remember if your gross starts going above this you will need to let the institutions know
  • isasmurf
    isasmurf Posts: 1,998 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Details and download form R85 here
  • Great - thanks for that. Do you know if it can be backdated?
  • deemy2004
    deemy2004 Posts: 6,201 Forumite
    Yes, it should be backdated to the start of the tax year, as common sense dictates that they either pay the interest gross or net, not part gross and part net. Hence ALL of the interest will be paid gross.

    Now IF you have already recieved a NET interest payment before you gave them the R85, then its upto the individual institutions procedures on whether they will then make a further payment of the tax deduction.

    If they don't then you can reclaim that tax payment on Form R40.
  • JC4LAB
    JC4LAB Posts: 25 Forumite
    Dont forget you can put £3000 a year in a tax free ISA
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