10% savings band

briskly_2

Does anyone know if Osborne is scrapping this? He was less than clear yesterday. to say the least. His wording even suggested that the current band would drop to 0%. None of the newspapers have picked up on this. We need to know!

jimjames

briskly wrote: »

Does anyone know if Osborne is scrapping this? He was less than clear yesterday. to say the least. His wording even suggested that the current band would drop to 0%. None of the newspapers have picked up on this. We need to know!

There really isn't anything for the papers to pick up on. The 0% referred to paying no tax on income up to £10k rather than the 10% band Labour scrapped.

I wasn't aware that there is a 10% tax band at present. The ones are 20%, 40% and 45%.

Reaper

There is a 10% band but its an odd one. The tax you pay on savings only is reduced to 10% if your taxable income is less than £2790 (2013/14 figure). See http://www.hmrc.gov.uk/rates/it.htm

I can't see anything in the budget document about, but here is the link if you want to check if I missed it:
http://cdn.hm-treasury.gov.uk/budget2013_complete.pdf

p00hsticks

jimjames wrote: »

I wasn't aware that there is a 10% tax band at present.

There is - but as stated on the HMRC website "The 10 per cent starting rate applies to savings income only. If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits. "

http://www.hmrc.gov.uk/rates/it.htm

I'm not aware of any changes made to it in the budget yesterday

Be_Happy

briskly wrote: »

Does anyone know if Osborne is scrapping this? He was less than clear yesterday. to say the least. His wording even suggested that the current band would drop to 0%. None of the newspapers have picked up on this. We need to know!

I'm sure that he said something about the 10% tax rate, either 'reverting to zero' or being scrapped. But it was passed over quickly and I've not heard it mentioned again.

briskly_2

Just heard from BBC Moneybox live and You and Yours (R4) that nobody yet knows whether the 10% savings band has been scrapped or not.

coastline

I think GO confused people during his budget speech as he mentioned the 10% tax rate...and he'd reduced it to zero.
I'm not sure but I think he was hinting that the Labour party might as well not bother trying to bring it back as the new basic allowance £10,000 was effectively eliminating it.
It looks like the 10p still applies to savings as the website still shows the allowance...

http://www.hmrc.gov.uk/rates/it.htm

For those with small incomes including savings on or below the £9440 then this is tax free...and can be reclaimed.
Any savings interest added to this can amount to £2790 and is taxed at 10% instead of 20%...

from feb 6th..

http://www.thisismoney.co.uk/money/saving/article-2274071/Lifeline-save-10p-savings-tax.html

from Jan...suggests it should be scrapped in exchange for a higher ISA allowance which didn't happen.

http://www.telegraph.co.uk/finance/personalfinance/9822551/Pensioners-face-paying-extra-tax-on-savings.html

arcadia00

If it was the savings rate he was talking about, it actually sounded like he reduced the 10% rate to 0% i.e. not abolish the allowance but have a 0% rate on it. That would be great if it were true. Maybe wishful thinking on my part though.

briskly_2

One of the newspapers online - the Telegraph I think - briefly thought this was the case yesterday; ie the 10% rate had been reduced to 0%. I still think it needs proper clarification by HMRC - they leave loads of outdated info on their site - until Jan 31 this year the 10% tax info was 5 years out of date.

jem16

Reaper wrote: »

There is a 10% band but its an odd one. The tax you pay on savings only is reduced to 10% if your taxable income is less than £2790 (2013/14 figure). See http://www.hmrc.gov.uk/rates/it.htm

It's a wee bit more involved than that.

Basically if your earned income was less than £9440 + £2790 so a total of £12,230 then you would be able to apply the 10% rate for your savings up to that level.

So for example if you earned £9500 and then had savings interest of £3000 you would be able to use the 10% rate on £2730.

However once your earned income is more than £12,230 you are not eligible for the 10% rate on any of your savings.

arcadia00

Having viewed the video again, I just think his mention of the 10% rate was as a dig at Labour who got rid of it. Nothing to do with the current 10% savings rate.