Tax Credits and Savings

sitroenn

As I understand it, you are allowed to receive Tax Credits whilst also having savings as long as you declare any income from interest accrued on those savings.

Because the interest on so many savings accounts is so poor I am considering taking out one of the 'high' interest current accounts (like Santander's 123) and using that for everyday transactions as well as interest on savings by drip feeding funds into it from another account until the balance reaches the limit.

BUT if I do this, will Tax Credits look at my current account with a healthy balance and question whether I am eligible for Tax Credit: in other words will they not see it as a Savings account on which I declare interest ?

Anyone else tried the same ?

Icequeen99

sitroenn wrote: »

As I understand it, you are allowed to receive Tax Credits whilst also having savings as long as you declare any income from interest accrued on those savings.

Because the interest on so many savings accounts is so poor I am considering taking out one of the 'high' interest current accounts (like Santander's 123) and using that for everyday transactions as well as interest on savings by drip feeding funds into it from another account until the balance reaches the limit.

BUT if I do this, will Tax Credits look at my current account with a healthy balance and question whether I am eligible for Tax Credit: in other words will they not see it as a Savings account on which I declare interest ?

Anyone else tried the same ?

Tax credits aren't interested in capital, only interest. It doesn't matter where that capital is held. Universal Credit of course will be a different kettle of fish, but that is a while away for most.

IQ

loracan1

If the interest were to be above £300, they would need to be informed - that'd be under the declaring 'other income' bit. They wouldn't need to know the balance.