Personal Savings Allowance guide

pecunianonolet

ColdIron said:

pecunianonolet said:

The questions is not if pension payments reduce taxable income, which is clear they do

Pension contributions from net salary do not reduce taxable income in the same way that Salary Sacrifice does. However they do raise the higher rate threshold from £50,270 thereby increasing the amount taxed at 20% and reducing that taxed at 40%

Thanks, will pass that on. At least some sort of win.

taxman1234

Just as an update to my savings interest...just had a wee look on my Government Gateway Personal Tax Account...tax code was changed from 1021n to 957n because
 "Your untaxed interest on savings has increased from £1094 to £1738"

So banks are sending interest details to HMRC?

I take it this is the way HMRC do it by reducing your personal allowance and then adding the low income £6000 savings allowance afterwards??

eskbanker

Yes, banks and building societies report savings interest to HMRC, who then adjust tax codes to aim to collect the right amount of tax via PAYE - the way they reduce codes is confusing to many, but if it still results in no PAYE deductions (or tax liabilities to be collected any other way) then it doesn't really matter....

taxman1234

Update:
Sorry...another wee question....I have a fixed rate Cash ISA with the max £20k in it which matures in Nov 2024.....I know I can top up a normal Cash ISA each 6 April but is this the same for fixed rate ISAs ?
If not.....can I then just open another Cash ISA (fixed or not) and have 2 ISAs running....or is this not allowed ?
Something in my small peanut of a brain tells me that I can't have 2 Cash ISAs running at the same time ??    

Thanks

eskbanker

taxman1234 said:

Update:
Sorry...another wee question....I have a fixed rate Cash ISA which matures in Nov 2024.....I know I can top up a normal Cash ISA each 6 April but is this the same for fixed rate ISAs ?
If not.....can I then just open another Cash ISA (fixed or not) and have 2 ISAs running....or is this not allowed ?
Something in my small peanut of a brain tells me that I can't have 2 Cash ISAs running at the same time ??  

The current rule is that you can't pay new money into multiple cash ISAs in the same tax year, but this restriction is lifted from April 2024 so you have free rein to do what you want after that.  Fixed rate versus variable status has never mattered....

taxman1234

eskbanker said:

taxman1234 said:

Update:
Sorry...another wee question....I have a fixed rate Cash ISA which matures in Nov 2024.....I know I can top up a normal Cash ISA each 6 April but is this the same for fixed rate ISAs ?
If not.....can I then just open another Cash ISA (fixed or not) and have 2 ISAs running....or is this not allowed ?
Something in my small peanut of a brain tells me that I can't have 2 Cash ISAs running at the same time ??  

The current rule is that you can't pay new money into multiple cash ISAs in the same tax year, but this restriction is lifted from April 2024 so you have free rein to do what you want after that.  Fixed rate versus variable status has never mattered....

Excellent....must admit didn't know about this change....thanks Eskbanker 

xylophone

Yes, banks and building societies report savings interest to HMRC, who then adjust tax codes to aim to collect the right amount of tax via PAYE - the way they reduce codes is confusing to many, but if it still results in no PAYE deductions (or tax liabilities to be collected any other way) then it doesn't really matter....

See

https://forums.moneysavingexpert.com/discussion/comment/80510722/#Comment_80510722

taxman1234

eskbanker said:

taxman1234 said:

Update:
Sorry...another wee question....I have a fixed rate Cash ISA which matures in Nov 2024.....I know I can top up a normal Cash ISA each 6 April but is this the same for fixed rate ISAs ?
If not.....can I then just open another Cash ISA (fixed or not) and have 2 ISAs running....or is this not allowed ?
Something in my small peanut of a brain tells me that I can't have 2 Cash ISAs running at the same time ??  

The current rule is that you can't pay new money into multiple cash ISAs in the same tax year, but this restriction is lifted from April 2024 so you have free rein to do what you want after that.  Fixed rate versus variable status has never mattered....

Sorry...back again....forgive me.

So on April 6th 24 I plan to stick £20k in easy access cash ISA.....so then I will have 2 cash ISAs....the easy access and the fixed one which matures Nov 24.
That sounds ok ?
However when my fixed rate is up in Nov does that mean I have "lost" my tax free status on that one and have to wait until April 25 because I have already used up my full £20k yearly allowance on the easy access ISA?
Or can I continue on...as it is technically not part of my allowance?
Sorry for being dumb.

InvesterJones

taxman1234 said:

eskbanker said:

taxman1234 said:

Update:
Sorry...another wee question....I have a fixed rate Cash ISA which matures in Nov 2024.....I know I can top up a normal Cash ISA each 6 April but is this the same for fixed rate ISAs ?
If not.....can I then just open another Cash ISA (fixed or not) and have 2 ISAs running....or is this not allowed ?
Something in my small peanut of a brain tells me that I can't have 2 Cash ISAs running at the same time ??  

The current rule is that you can't pay new money into multiple cash ISAs in the same tax year, but this restriction is lifted from April 2024 so you have free rein to do what you want after that.  Fixed rate versus variable status has never mattered....

Sorry...back again....forgive me.

So on April 6th 24 I plan to stick £20k in easy access cash ISA.....so then I will have 2 cash ISAs....the easy access and the fixed one which matures Nov 24.
That sounds ok ?
However when my fixed rate is up in Nov does that mean I have "lost" my tax free status on that one and have to wait until April 25 because I have already used up my full £20k yearly allowance on the easy access ISA?
Or can I continue on...as it is technically not part of my allowance?
Sorry for being dumb.

There's an ISA subboard which might be best for these questions, but simple answer is transfers don't count as new contributions, so the fixed rate will become a cash ISA of some type and you're free to then transfer that to another fix or any other ISA without it affecting the new contributions limit.

taxman1234

Probably been posted on here lots of times but here's the Income Tax Calculator with the interest boxes too.

http://stccalculator.hmrc.gov.uk/UserDetails.aspx

Puts my mind at rest.