MSE News: Budget'15: Savers to get up to £1k personal allowance before interest taxed

sacko1305

Does the savings tax change mean that NS&I will pay the pensioner bonds without deducting tax?

Mr_K

Even though I'd benefit quite a bit, the NHS need this money rather than wealthy savers. How come we have money to give away all of a sudden, don't we have a deficit ?

We all know why this has suddenly happened, Budgets should be banned 6 months before an election. Lots of tax rises next Budget whichever clown delivers it.

jimjames

Mr_K wrote: »

Even though I'd benefit quite a bit, the NHS need this money rather than wealthy savers. How come we have money to give away all of a sudden, don't we have a deficit ?

We all know why this has suddenly happened, Budgets should be banned 6 months before an election. Lots of tax rises next Budget whichever clown delivers it.

The NHS will always take more money. Any service with unlimited demand will always be able to spend more.

NSG666

Mr_K wrote: »

Even though I'd benefit quite a bit, the NHS need this money rather than wealthy savers. How come we have money to give away all of a sudden, don't we have a deficit ?

We all know why this has suddenly happened, Budgets should be banned 6 months before an election. Lots of tax rises next Budget whichever clown delivers it.

Assuming you could get 2% somewhere you'd need £50000 to get the £200 benefit of not being taxed - not necessarily a sum held only by wealthy savers.

Just_landed

How will this impact on the new rules coming into force this April 2015 regarding the 0% tax on first £5000 of savings if your total income is less than your personal allowance plus £5000?


I'm glad you wrote this I was beginning to think I had dreamt about the £5000 of savings 0% tax.

talexuser

No impact, the 5 grand is only available if your total income is less than your tax allowance. The 1 grand is available to all basic rate taxpayers?

colsten

finally_retired wrote: »

How will this impact on the new rules coming into force this April 2015 regarding the 0% tax on first £5000 of savings if your total income is less than your personal allowance plus £5000?

There is a given amount below which no income tax is due on savings. This amount will be £15,600 from April 2015, and will rise to £16,800 from April 2016 (unless overturned by new government). The max £1,000 / £500 tax free interest only applies to BR and HR tax payers who earn more than £16,800. At least that's how interpret attached.

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

EDIT: In reality it will probably be a tad more complex but essentially, you will only be gaining. https://www.gov.uk/government/publications/issue-briefing-starting-tax-rate-for-savings-interest/issue-briefing-starting-tax-rate-for-savings-interest

Gers

jimjames wrote: »

Not sure why that's unexpected. It needs to be passed by parliament so would be dependent on who forms the next government but does focus minds on who that might be.

Because other changes are immediate and some are up for a vote before the end of this current session. My view is that this is only a manifesto pledge and not part of this Budget.

Spidernick

So dividend income doesn't count as 'savings' by the looks of it? Are these to be taxed as normal, does anyone know?

Also, if the interest is tax-free, is it then ignored for the purposes of 'income' for the child benefit claw back calculation for income over £50K?

Quite a few questions, sorry, but these sort of changes always seem to lead to quirks that need to be addressed.

Archi_Bald

I doubt dividends will be included as they aren't included now in the tax relief for savings, and dividends are income from investments, not from savings: https://www.gov.uk/apply-tax-free-interest-on-savings/changes
I have not seen anything that was talking about changes to dividend taxation.

For child benefit: https://www.gov.uk/child-benefit-tax-calculator