Tax credits and interest on savings

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With the new allowance that you don't pay tax on the 1st £1,000 of interest on savings does this mean that interest on savings isn't counted for tax credit purposes (if under £1,000)?


Basically treated in the same way as interest from ISAs and isn't part of the £300 allowance.

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  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    The tax credit rules haven't changed. The interest is still taxable, it's just taxed at 0% on the first £1,000.

    Tax credits is based on taxable income regardless of whether you actually pay any tax.

    Eg you get a £11,000 personal allowance this year. You still need to declare any income under this amount.
  • UKSBD
    UKSBD Posts: 799 Forumite
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    The tax credit rules haven't changed. The interest is still taxable, it's just taxed at 0% on the first £1,000.

    Tax credits is based on taxable income regardless of whether you actually pay any tax.

    Eg you get a £11,000 personal allowance this year. You still need to declare any income under this amount.


    Thanks, so it's similar to VAT then where some things are non VAT and some things are zero rated.


    Is the difference because ISA interest isn't classed as an allowance it's classed as non taxable income?
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    UKSBD wrote: »
    Thanks, so it's similar to VAT then where some things are non VAT and some things are zero rated.


    Is the difference because ISA interest isn't classed as an allowance it's classed as non taxable income?

    Know nothing about vat.

    ISAs are tax free rather than 0%.
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