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

iltisman

Now that I will have to fill in a digital tax return on the few pounds over the £1000 it will give me the incentive to invest in areas other than 1% - 2.5% savings accounts.

jimjames

ceredigion wrote: »

One thing that has occurred to whilst reading this , is that the treasury has no desire or intension to see interest rise at any point in the future as that would cost them a lot of money in the future. Baring in mind that 20% of not a lot, is very little to them. Is probably not worth worrying about.

I thought something similar. A reason to do this is if the expectation is that rates will not be rising significantly soon, they wouldn't implement a scheme that suddenly gives away lots of money if that was likely soon.

JezR

It was presented as simplification because of the abolition of the R85 registration, and a benefit to those who hitherto have not used the R85 or reclaimed the tax when entitled to for whatever reason.

jamesd

iltisman wrote: »

Now that I will have to fill in a digital tax return on the few pounds over the £1000 it will give me the incentive to invest in areas other than 1% - 2.5% savings accounts.

You won't have to fill in a digital tax return because of these changes. The banks will report the interest to HMRC just as they do now and HMRC will modify their systems to automatically use that information to adjust your tax code for PAYE.

Instead of HMRC using its information to trap you if you don't report, now they will use it to help you pay the right amount of tax without any work on your part.

ceredigion

jamesd wrote: »

You won't have to fill in a digital tax return because of these changes. The banks will report the interest to HMRC just as they do now and HMRC will modify their systems to automatically use that information to adjust your tax code for PAYE.

Yeah and the treasury will permanently be in arrears and trying to play catch-up.

no1catman

I read it as from next tax year i.e. 6th April 2016 - interest from banks & building societies etc. will be paid without any deductions for tax.


Used to keeping records of 'Other Income' for WTC - no problem doing something similar on the off-chance I could get over. But all the more incentive to go ISA (aren't included in WTC - either).

lejog2003

Reaper wrote: »

I like the idea of "real time". I would like to add tax info as I receive it not file it away then sort it out later. So I get a P60 from work and type the figures straight in. I get an annual statement from the building society and type in the interest earned.

Then the end of tax year task simply becomes one of scanning down and double checking I haven't missed anything.

You won't have to do any typing for interest whatsoever, all thats happening is that the data that the banks/building societies/stockbrokers have provided to the taxman for a couple of decades now will be automatically dispayed against your account, instead of you having to type in again for the taxman to check at its leisure.

All interest over the £500 allowance for higher rate tax payers will be automatically taxed at 40%, instead of relying on their honesty in declaring it.

lejog2003

Gers wrote: »

The BBC site has it that this will only come into operation if the Tories win the election. Not quite what I was expecting.

http://www.bbc.co.uk/news/uk-politics-31929772

Ed Balls has said that there was no measures in the Budget that he'd seek to reverse if he became Chancellor after the election.

iltisman

lejog2003 wrote: »

Ed Balls has said that there was no measures in the Budget that he'd seek to reverse if he became Chancellor after the election.

He may not have the freedom to do that if the SNP are pulling the strings.

steelbru

iltisman wrote: »

He may not have the freedom to do that if the SNP are pulling the strings.

He's also ruled out a coalition with the SNP