Tax on Interest

JWalker1995

Hi,

I earn below £15,000 per yer, which i believe is around the cut off of interest tax? Am I entitled to a higher interest rate?

i don't really get this so a good explanation would be great.

Thanks
James

maas

You can check here
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414637/R85_Helpsheet_150318.pdf

If you are eligible, send your bank an R85 form and they will start paying you interest as gross.

jonesMUFCforever

I don't understand the question?

Are you asking about income tax or tax on savings?

If you are asking about savings tax - you should be paying 20% tax on interest earned unless the money is held within an ISA.
Tax free allowance before you pay income tax is £10600

Going forward this will all change from April 2016 when you will be given a seperate tax allowance before you will start to pay tax on savings interest.

enthusiasticsaver

I am in the same position. If you earn less than £15000 you can get your interest gross of tax providing the amount of interest earned does not take you over the limit. Register the R85 with your bank. From April though all interest will be paid gross anyway regardless of tax status and it is up to people to declare it on their tax returns. Not sure how that will work.

JWalker1995

Apologies this is not for ISA's, this is just for bog standard current/savings accounts,

So does it still apply, do I have to pay the tax on it?

Vortigern

JWalker1995 wrote: »

Apologies this is not for ISA's, this is just for bog standard current/savings accounts,

So does it still apply, do I have to pay the tax on it?

No, you don't need to pay tax on your current account.

You need to send form R85 to your bank. They will probably refund the tax you've paid since April 2015.

Follow the link in post 2. The info you need is there.

JWalker1995

enthusiasticsaver wrote: »

They will probably refund the tax you've paid since April 2015.

Does that mean I could apply in March 2016 and get backdated for the year? Just I'll get a bonus in March but I don't know how much it will be until March, and might push me over the amount

Vortigern

JWalker1995 wrote: »

Does that mean I could apply in March 2016 and get backdated for the year? Just I'll get a bonus in March but I don't know how much it will be until March, and might push me over the amount

You could wait till March if you don't know what your earnings for the year will be. The bank will refund for the current tax year only.

You'd have to claim from HMRC for previous years, or if you leave it too late this year.

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf
but read £15,600 for £15,500.

http://www.thisismoney.co.uk/money/saving/article-3117390/New-rule-lets-claim-5-000-tax-free-allowance-claim.html



http://www.moneysavingexpert.com/savings/tax-free-savings

JWalker1995

Sorry for all the questions, does this apply for the Tax Year April 2014 - April 2015? is was this just introduced this tax year?

xylophone

April 2014 - April 2015?

No. http://taxaid.org.uk/guides/information/rental-income-savings-income-and-pensioner-issues/taxation-of-savings/the-10-starting-rate-for-savings-income