Budget 2015

jimjames

Kendall80 wrote: »

I keep the majority of my cash savings in high interest current accounts. As these are not strictly savings accounts I do hope the tax free interest applies to these too.

The announcement appears to make no mention about the type of accounts. Just that £1000 of interest will be free of tax.

Seeing the link just posted it looks even better. All interest to be paid gross if I've read it correctly.

Ed-1

knack92 wrote: »

Here's information about the savings allowance:

1.222 In a radical reform to the savings tax system, a new Personal Savings Allowance will be created from April 2016, exempting the first £1,000 of savings income from any tax for basic rate taxpayers and the first £500 for higher rate taxpayers, saving up to £200 off an annual tax bill. This will not apply to additional rate taxpayers.

1.223 From April 2016, 95% of taxpayers can save completely tax free each year and choose from a range of savings products to meet their specific needs.

1.224 Because so many people will no longer pay tax on their savings, the automatic deduction of tax by banks and building societies will no longer be necessary. At present, 20% Income Tax is automatically deducted from most interest on savings outside ISAs. For those on low incomes, a 0% rate is applied, but only for those who have filled out a form to confirm they are eligible to receive gross interest. Higher rate taxpayers owe 40% tax and are therefore required to notify HMRC of their savings income so they can pay the additional 20%. Both the opt out and the requirement to notify HMRC are complex, burdensome and poorly understood. Budget 2015 announces that the automatic deduction of 20% income tax by banks and building societies on non-ISA savings will cease from April 2016. These changes represent a major tax simplification.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/413949/47881_Budget_2015_Web_Accessible.pdf
Page 57

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414026/Savings_factographic_final.pdf

This is significant: From April 2016 banks and building societies will stop automatically taking 20% in income tax from the interest earned on your non-ISA savings.

i.e. the abolishment of R85.

In terms of the Halifax Reward accounts discussed earlier, I can see them making changes as £6.25 a month doesn't have the same marketing ring to it as £5.

Archi_Bald

Reaper wrote: »

Help to buy ISA - argh! Terrible idea.

All the "Help to buy" schemes are an illusion. With limited supply all it means is house prices go up in line with the buyers extra cash. No extra person gets to buy a house and we all have to pay increased taxes to pay for this idiotic giveaway.

I wish the government would stop interfering in the housing market.

Hey what is idiotic about you people getting huge encouragement to save? I am all for it, even if I did have to finance some of it. Contract between generations 'n such stuff.

Archi_Bald

jimjames wrote: »

The announcement appears to make no mention about the type of accounts. Just that £1000 of interest will be free of tax.

Seeing the link just posted it looks even better. All interest to be paid gross if I've read it correctly.

Don't get too excited. God forbid, but we might still see an emergency budget in May/June that will do away with all of it.

knack92

Archi_Bald wrote: »

My guess is that the £1,000 (£500 for HR tax payers) tax free interest on savings would be implemented by people having to give banks their NI numbers so the personal tax accounts (one of those new-fangled ones he has announced) can be updated. HMRC can then collect any tax that might be due. Or people will just have to declare interest that's above the tax free amounts. Who knows.

Not too much point to worry about it until we know the results of the general election.

Government claim this change will benefit 95% of taxpayers so I'd have thought it would be the latter.

grimsalve

Ed-1 wrote: »

This is significant: From April 2016 banks and building societies will stop automatically taking 20% in income tax from the interest earned on your non-ISA savings.

Makes perfect sense to me, it's just a pity we've got to wait another 12 months before it will happen.

Ed-1 wrote: »

In terms of the Halifax Reward accounts discussed earlier, I can see them making changes as £6.25 a month doesn't have the same marketing ring to it as £5.

I'm guessing Halifax will just reduce it to £5 "gross".

Ed-1

grimsalve wrote: »

I'm guessing Halifax will just reduce it to £5 "gross".

My guess is they might ditch the account completely. It's been going over 6 years.

TheTracker

Just a few months ago in the autumn statement

2.185 Withholding regime applied across peer-to-peer lending platforms – The government will consult on the introduction of a withholding regime for Income Tax to apply across all P2P lending platforms from April 2017.

Firmly of the opinion politicians make it up as they go along.

lightbulb2760

So will this new £1000 tax free savings allowance operate instead of, or in addition to, the £5000 nil-rate tax band on savings announced in last year's Budget, to be introduced this April?

Rollinghome

Ed-1 wrote: »

[1.224 Because so many people will no longer pay tax on their savings, the automatic deduction of tax by banks and building societies will no longer be necessary. [/URL].

Will that mean that all those who earn a pound more than £1000 in interest will have to fill in tax returns of some kind to declare it? Many may be on PAYE or pensioners supplementing their pensions who have never needed to complete tax returns before.

Not sure that will go down well apart from with those looking for overtime pay at HMRC.