New high rate tax payer - savings review

Cappsy

I've just had a promotion and decent payrise :j and am now a higher rate tax payer:eek:

As a result of this I'm trying to review what I'm doing with my savings and (limited) investments and would appreciate some help. Any suggestions from the floor?

My current situation is listed below (gross interest rates).

Mortgage Repay 5.64% -c£31000 (£352/month 'til 2016)
YBS Regular 7.0% £3,500 (£500/month)
NS Certificate RPI+1.05% £6,000 (Tax free, 3yr, 1yr in)
Cash ISA 5.00% £16,500 (about to transfer to YBS 5.65%)
YBS Internet Sav 5.55% £7,000 (£3000 is for YBS ISA next month)
KR Saver 4.6% £450 (£25 month) (you never know!)
SL Endowment Surrender value £12,000 (still got it! £50/month, statement due)
S&S ISA £4,100 (Artemis Capital Fund)
SL Shares £2,900
Company Sharesave £225 (£75 month until 2010)

Secondly how do I go about squaring the extra tax due on savings interest with the tax office? Will I need to start filling in a self assessment form?

Many thanks in advance
C

david78

Congrats on your promotion :beer:

Of your list, these are all tax free investments:

• Mortgage Repay 5.64% -c£31000 (£352/month 'til 2016)
• NS Certificate RPI+1.05% £6,000 (Tax free, 3yr, 1yr in)
• Cash ISA 5.00% £16,500 (about to transfer to YBS 5.65%)
• Company Sharesave £225 (£75 month until 2010)
• S&S ISA £4,100 (Artemis Capital Fund)
• SL Endowment Surrender value £12,000 (still got it! £50/month, statement due)

You pay tax on these:

• YBS Regular 7.0% £3,500 (£500/month)
• YBS Internet Sav 5.55% £7,000 (£3000 is for YBS ISA next month)
• KR Saver 4.6% £450 (£25 month) (you never know!)
• SL Shares £2,900

So pretty tax efficient already. Aside from the obvious of using your CASH ISA and Stocks and Shares allowances, your only other sources of tax free interest are NS&I certificates and overpaying your mortgage, though you might not want to do the latter if you don't have an offset/flexible deal or are about to remortgage soon.

You have not mentioned pensions. If you pay into a company scheme then you can deduct these contributions from your Salary before you assess whether you are a HRT or not. Also you can make payments to a personal pension (e.g. stakeholder or SIPP) to keep you in the BRT band.

Cappsy

david78 wrote: »

Congrats on your promotion :beer:.

Thank you David

david78 wrote: »

You have not mentioned pensions. If you pay into a company scheme then you can deduct these contributions from your Salary before you assess whether you are a HRT or not.

I hadn't realised that. I do pay into a company pension, I'll have to check out the numbers.

david78 wrote: »

Also you can make payments to a personal pension (e.g. stakeholder or SIPP) to keep you in the BRT band.

Thanks, again, something I hadn't realised.

I probably need to do more with Stocks and Shares ISAs (I've had the Artemis CF since early 2001) but am very green in that area. Research needed I think.

Thanks again:T
C

StevieJ

With reference to your tax position, your local tax office will require a letter identifying any dividend and interest payments after the tax year end, they can then either ask for a payment or adjust your tax code for the next year.
I don't think you will need to complete a SA tax form unless you have other complications.

Cappsy

Thanks for that Stevie, I've no other tax issues to complicate things so should be staightforward.
Cheers