Personal Savings Allowance guide

ukdya

Am I going to be worse off... I,m 79
My gross income is £10200 of which £6000 is interest... Division and savings (Build socs)
Last year as I was under the allowance, all the tax paid was Paid back , which paid my accountant as I,m not well.
Next year all the Build socs will pay interest gross and I will still be under the £10,800 income.
NOW this £1000 tax free savings can't work for me ..CAN IT?? as there is no tax paid interest from the building socs to recover.....OR OR is there some magic with this £1000 tax free thing that get me money back....... My Interest next year will still be gross £6000 but how does HMRC allow me to recover like last year???????

talexuser

If your taxable income is less than £11000 next tax year then you have £5000 plus £1000 equals £6000 savings interest allowance. So if with those figures total income is less than £17000 you will pay no tax. Interest will be paid gross by banks/building socs, and it will be your responsibility to declare anything over those limits with a system yet to be made clear.

Eco_Miser

Ukdya wrote: »

Am I going to be worse off...

No.
You paid no tax this year (after claiming any deducted back), you'll pay no tax next year, and none will be deducted, so no claims to make.

I reckon that makes you very slightly better off, in that you don't have to spend time or money reclaiming overpaid tax.

badger09

Eco_Miser wrote: »

No.
You paid no tax this year (after claiming any deducted back), you'll pay no tax next year, and none will be deducted, so no claims to make.

I reckon that makes you very slightly better off, in that you don't have to spend time or money reclaiming overpaid tax.

And you'll be earning interest on the tax which would have been automatically deducted (as you apparently didn't register to have it paid gross:cool:)

ricky101

Hi,

Just joined in this thread as like others its not very clear about pensioner savings tax for 2016/17 onwards.

Think comments like this from one of MSE own blogs does give pensioners the wrong idea

Do the rules change if I'm a pensioner?

Quite simply the answer is no. The same rules apply.

However, while not doubting Colsten and Ecomiser , have found this 2015/16 Gov.doc clearly stating the £5000 saving allownace for pensioners/low paid, have yet to find any such similar document for 2016/17.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf

Think if such a document was around it would calm a lot of folks fears, though I do wonder what will happen to the £1000 PSA when the interest rates go up, a lot of folk could be caught out.

Fred_May

I open a one year fixed rate bond and receive my interest annually and exceed the new personal tax allowance limit. This means my tax code will change. If i am paid monthly, 20% tax will be deducted monthly. For 11 months i will pay 20% tax on interest that i have not received. Are my statements correct. If so is it legal to deduct tax on interest before you have received any?

Fred_May

The more i discover re: personal tax allowance, the more i realise how much the Government have tricked us. They inform us of the allowance with no mention of downfalls.

Personal tax allowance can put you into the top rate of tax bracket. Because your interest is counted as earnings so included in your tax coding.
PTA means that if the allowance is exceeded your normal tax coding will become lower. If you decide to spend your own savings, this will alter interest earned, and therefore you will need to get your tax code changed. The scenario being if you withdraw savings each month you will need to change your tax code each month if you do not want to overpay tax!!!!!
PTA means if you have a long term investment, maybe a 5 year bond as an example. The interest from this makes you exceed the PTA limit. There is no way out without cancelling your investment which may incur penalty fees. In this situation tax will be stopped monthly even if your interest has not been paid, you may have been put into the higher tax bracket, and if you do manage to spend any savings inform the tax office for a new coding.
I have always been a saver. I do not want Mr Osborne to control my savings. I will reduce my savings and not exceed the personal savings allowance. The only way out for me is to invest in ISA's.
How long do you wait on the phone to speak to the Tax Office. How many times will everyone need to contact them to change your tax code.
Finally how long will it be before we are changed to an easier and fairer system like, Being taxed at
source !!!!!!!!

ricky101

When the bond holder pays interest to your account it has to deduct tax, thats the law for this tax year.
However monthly interest is normally paid out of the main account so you can receive an actual mothly income.
Having it paid monthly but remaining in the account is typically pointless as the monthly and yearly interest rates will normally pay the same amount over the year.

If you are trying to avoid next years 2016/17 PSA limits then perhaps consider using an ISA cash account or shares wrapper for some of your savings.

Arthurian

ricky101 wrote: »

Hi,

Just joined in this thread as like others its not very clear about pensioner savings tax for 2016/17 onwards.

Think comments like this from one of MSE own blogs does give pensioners the wrong idea
However, while not doubting Colsten and Ecomiser , have found this 2015/16 Gov.doc clearly stating the £5000 saving allownace for pensioners/low paid, have yet to find any such similar document for 2016/17.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf

Think if such a document was around it would calm a lot of folks fears, though I do wonder what will happen to the £1000 PSA when the interest rates go up, a lot of folk could be caught out.

This confirms the £5000 starting band for 2016-17 https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2016-17/tax-and-tax-credit-rates-and-thresholds-for-2016-17 . Hope it sets your mind at rest.

Kass_Evans

I have a three year fixed rate bond taken out in June 2014. The interest I received in 2015 had 20% tax deducted but in 2016 is won't. Neither will 2017. As I do not have access to the interest until 2017 upon maturity do I declare the 2016 interest on the 2016/17 tax return or do I declare it along with the 2017 interest on the 2017/18 tax return when I do have access to the money