10% Savings Tax

John_Pierpoint

jem16 wrote: »

Basically the working is like this;

Total income is £9082. Taxable income is £9082 minus £7475 which is £1607.

However earned income is £8862 minus £7475 which leaves £1387 of it taxable at 20% presumably handled through PAYE.

The 10% savings band for 2011/12 was £2560. £2560 minus the earned taxable income of £1387 leaves £1173 of that band still to be utilised against any savings income. Your £220 is well within that so would be taxed at 10% as opposed to 20%. Interest taken by the bank would be £44. Interest due would actually be £22 if only in your name.

If the account is only in your name you are due a refund of £22. If it was a joint account you are due a refund of £11.

I seriously doubt that, if we sat on the mythical "Clapham Omnibus", not one passenger in a 1,000 could explain this correctly.

It rather reminds me of the days when the notional advanced corporation tax was reclaimable on company dividends in similar circumstances. [IT IS NOT NOW one of the reasons why some people's "company" pensions have gone phut and a lot more are seriously underfunded].

In the case of the Advanced Corporation Tax, I went into a tax advice office on behalf of my pensioner mother, and they got it wrong.
It was the Saturday Financial Times that managed to explain the then new rules correctly.