April 2016 £1000 interest free

robber2

melbury wrote: »

So will all interest earned on all savings accounts be paid gross with effect from 5th April 2016? Is that right?

If so, GREAT!

I know I'd find the definitive answer eventually ;

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

zolablue25

bowlhead99 wrote: »

Banks have your name, date of birth and NI number

Do they? I never had to give my NI number to open a TSB account or an M&S one. I did need to give my name, address and DoB though.

On a slightly different point - if you have, say, a joint Santander account, is the interest you earn effectively halved i.e. the account earns £500 but I would only use £250 of my allowance and my wife would use £250 of hers?

Cheers

AlanP_2

zolablue25 wrote: »

Do they? I never had to give my NI number to open a TSB account or an M&S one. I did need to give my name, address and DoB though.

On a slightly different point - if you have, say, a joint Santander account, is the interest you earn effectively halved i.e. the account earns £500 but I would only use £250 of my allowance and my wife would use £250 of hers?

Cheers

Joint accounts are treated as being owned 50/50 so yes half the interest against each account holder.

bigfreddiel

AlanP wrote: »

Joint accounts are treated as being owned 50/50 so yes half the interest against each account holder.

If you have a joint account with Santander, you can each have your own account with £20k in each and earn another 3% on £40k

Each account must comply with rhe direct debit rules an pay in £500.

So that's easy enough.

You can also set each account to pay interest with no tax taken off now, it's an option on the online banking access.

Cheers fj

zolablue25

bigfreddiel wrote: »

If you have a joint account with Santander, you can each have your own account with £20k in each and earn another 3% on £40k

Each account must comply with rhe direct debit rules an pay in £500.

So that's easy enough.

You can also set each account to pay interest with no tax taken off now, it's an option on the online banking access.

Cheers fj

Thanks for the info but I don't have enough cash to warrant 2 x Santander accounts with the £5 per month charge. I can offset some of this charge with my current DDs but I wouldn't get enough cashback for 2 accounts. I haven't yet set up any of the better paying accounts either so I am currently looking at those. Once they are maxed out I might look at Santander again but I think that may be a while yet!.

Chaykin

I just hope that banks will correctly calculate interest from Regular Savers opened before the new tax year starts and finishing after i.e. deducting 20% tax on daily interest before April and not doing so after...

YorkshireBoy

Chaykin wrote: »

I just hope that banks will correctly calculate interest from Regular Savers opened before the new tax year starts and finishing after i.e. deducting 20% tax on daily interest before April and not doing so after...

Since interest is only taxed when it's paid, they can't do anything else but (continue to) "correctly calculate" it!

Uneducated_Archie

Me and the wife are likely to receive more than 1K each in interest. I'm retired and receive just over 2K per month (after tax) in state and other pensions. The wife is still working and draws her state pension of about £100 a week, but will retire in Oct/Nov this year. She should get a pension from her employer (NHS) based on wages of 34K per year with 21 years service based on the *80x number of years.

Certainly in the year from Apr 16 we will receive more than 1K each based on a 3 year bond (its last year) which last year paid out 2.2K, we have other savings too.

If banks are going to pay interest gross will they be informing the Inland Revenue of each payment and will Inland Revenue then calculate how much tax we'd need to pay above the 1K limit?

Will they for instance be told about the odd .89p interest from Nationwide postal account, the £3.40 in share dividend from "x" number of Barclays shares?

Ideally for us the Inland Revenue will do all work, I certainly don't fancy accruing all the paper work to submit to them.

I might be wrong (I probably am) but I thought the 1K interest applied for this financial year? Is that the case?

Thank you

polymaff

Uneducated_Archie wrote: »

If banks are going to pay interest gross will they be informing the Inland Revenue of each payment and will Inland Revenue then calculate how much tax we'd need to pay above the 1K limit?

Will they for instance be told about the odd .89p interest from Nationwide postal account, the £3.40 in share dividend from "x" number of Barclays shares?

Yes - theoretically - but you will still be responsible for calculating and paying all tax due, when due.

Uneducated_Archie wrote: »

I might be wrong (I probably am) but I thought the 1K interest applied for this financial year? Is that the case?

Thank you

No, this year (2015/16) the only savings concession is the £5,000 Starting Rate Allowance. Next Year (2016/17) there will also be the £1,000/500/0 Personal Savings Allowance.

colsten

Uneducated_Archie wrote: »

..........

Will they for instance be told about the odd .89p interest from Nationwide postal account, the £3.40 in share dividend from "x" number of Barclays shares?

Ideally for us the Inland Revenue will do all work, I certainly don't fancy accruing all the paper work to submit to them.

Dividend income doesn't count as savings income, and you'll be pleased to hear you will have a £5,000 dividend allowance from next tax year onwards.

For savings, there shouldn't be any need to keep lots of paperwork (I have none as all my accounts are online and paperless). Just tot up your interest payments as they happen, and tell the HMRC if, at the end of a tax year, you made more than £1,000 in interest. During 2016/17, it should become a lot clearer how HMRC wants us to tell them about savings that exceed the allowance.