Personal Savings Allowance

Neil_John_Roberts

I asked in my local Santander Bank if interest earned in a current account would be considered as savings and be eligible for the allowance. To my surprise they did not know.

molerat

They don't need to know, it is up to you to know and make the necessary declaration. And the answer is yes it is.

Vortigern

Interest is taxable within the savings band, if you qualify.
Cashback is not taxable.

Do you expect bank staff to offer tax advice?

Archi_Bald

Santander automatically subtracts 20% from current account interest unless you have declared that you are entitled to gross interest. They will continue to do so at least until April 2016, like all other banks will, too.

Which allowance are you referring to?

jimjames

Neil_John_Roberts wrote: »

I asked in my local Santander Bank if interest earned in a current account would be considered as savings and be eligible for the allowance. To my surprise they did not know.

If you're referring to the budget announcement then it's hardly surprising.

The relevant law hasn't even been passed and depending on the election result may not be so why would you expect the bank to know the details?

roxy28

Neil_John_Roberts wrote: »

I asked in my local Santander Bank if interest earned in a current account would be considered as savings and be eligible for the allowance. To my surprise they did not know.

I would imagine a few people are filling in the R85 form to have the interest paid gross on certain current accounts they have.
Seems right surely.

JRG

Both George Osborne and Martin Lewis have specified 'savings' account interest. Despite what Martin says, the Santander 123 account, and similar accounts in Lloyds and TSB, et al, are 'current' accounts. Therefore, one must assume they are NOT included in the Personal Savings Allowance, even if they are being used as such, until such time as the Chancellor (whoever it may be) puts it into the Finance Bill.

Vortigern

HMRC refer to "interest from banks and building societies"; they do not differentiate between savings accounts and current accounts.

Trillain

Since the automatic deduction of income tax will no longer be required at source I think you absolutely can assume currents account interest will be included.

jimjames

JRG wrote: »

Both George Osborne and Martin Lewis have specified 'savings' account interest. Despite what Martin says, the Santander 123 account, and similar accounts in Lloyds and TSB, et al, are 'current' accounts. Therefore, one must assume they are NOT included in the Personal Savings Allowance, even if they are being used as such, until such time as the Chancellor (whoever it may be) puts it into the Finance Bill.

Any interest regardless of account type will count towards the allowance. Current accounts and savings accounts both pay interest in the same way.

What will not count is dividend income.

Vortigern

JRG wrote: »

Both George Osborne and Martin Lewis have specified...

Neither of those gentlemen is a tax expert!