postoffice savings and tax please help

bambi1984

right im new to savings ive started saving 650 a month started october 25 and only got 650 in it got a credit of 1.05 and a tax deduct of 11p im not bothred withit being 11p but ius this what hell be like all time taxing me on the intreset or the acutually savings? i thoughtt u didnt get tax b4 £6500 please help

Baldur

bambi1984 wrote: »

right im new to savings ive started saving 650 a month started october 25 and only got 650 in it got a credit of 1.05 and a tax deduct of 11p im not bothred withit being 11p but ius this what hell be like all time taxing me on the intreset or the acutually savings? i thoughtt u didnt get tax b4 £6500 please help

Savings interest is taxed at 20% unless you are a non-taxpayer (tax bands HERE) - if you qualify for gross interest, i.e. your total income is less than your allowance, you need to complete a form R85 - see http://www.hmrc.gov.uk/incometax/tax-free-interest.htm

alanq

To reclaim tax already paid on interest you require an R40.

bambi1984

its just a single savers account but it sounds right 20% of the interest tax. Ill only be saving max of £6000 for a nice car and pay insurance off in full

psychic_teabag

Since you're saving monthly for a specific short-term goal, you could consider a regular savings account which gives a higher interest rate. http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

soulsaver

bambi1984 wrote: »

right im new to savings ive started saving 650 a month started october 25 and only got 650 in it got a credit of 1.05 and a tax deduct of 11p im not bothred withit being 11p but ius this what hell be like all time taxing me on the intreset or the acutually savings? i thoughtt u didnt get tax b4 £6500 please help

If you are saving £650 pmonth then you must be earning more than £6500 per year, so you get taxed on savings interest.
And you say in one of your other posts:

bambi1984 wrote: »

also rompa do u pay interest even if ur not over the allocated alowence is this just on the interest are the actually balance? or interest earnt !! yeah i am also the basic tax payer

And as a basic rate tax payer, you paid 11p on £1.05 (or maybe £1.16)? You did well then.
It's a wind up, right? Quite funny though!