Tax Rate on Interest from Savings Account

BoGoF

The basic rate band is £35,000 but you need to add the personal allowance of £7475 to this so your taxable income needs to be more than £42475 to be higher rate

jem16

DotMatrix wrote: »

Part of my salary is taxed at 40%. The band for 40% income tax is £35k

That's the taxable income part. This is in addition to your personal allowance which unless you have taxable benefits is £7475.

So if your tax code is the normal 747L then 40% tax starts at £35,000 plaus £7475 so a total of £42,475. However taxable income includes gross salary plus gross savings interest MINUS pension contributions.

So based on that are you a higher rate taxpayer?

DotMatrix

Thanks all, understood now.