Tax free savings for low earners

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Just a reminder to all low earners, anyone who earns less than £17,000 including interest do not pay any tax.

Not to be confused with the £1000/£500 tax free interest available to all standard rate/higher rate tax payers.

For more info see the GOV web pages:

https://www.gov.uk/apply-tax-free-interest-on-savings

So with a little bit of organising couples can sort their finances to maximise their tax free interest and earnings.

Cheers

fj

Comments

  • LXdaddy
    LXdaddy Posts: 693 Forumite
    First Anniversary Combo Breaker
    edited 10 April 2016 at 11:46PM
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    Not quite accurate I'm afraid.
    Just a reminder to all low earners, anyone who earns less than £17,000 including interest do not pay any tax.

    Not to be confused with the £1000/£500 tax free interest available to all standard rate/higher rate tax payers.
    Not "anyone". Just those with earned [strike]interest[/strike] income of no more than £11,000. Someone with earned income of £12,500 and interest of £4,500 would pay tax on the £1,500 between £11,000 and £12,500.


    And the £17,000 INCLUDES the £1000 Personal Savings Allowance


    See polymaf's post for a better explanation
    http://forums.moneysavingexpert.com/showpost.php?p=70422918&postcount=9
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    Combo Breaker First Post
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    LXdaddy wrote: »
    Not quite accurate I'm afraid.







    Not "anyone". Just those with earned interest of no more than £11,000. Someone with earned income of £12,500 and interest of £4,500 would pay tax on the £1,500 between £11,000 and £12,500.


    And the £17,000 INCLUDES the £1000 Personal Savings Allowance


    See polymaf's post for a better explanation
    http://forums.moneysavingexpert.com/showpost.php?p=70422918&postcount=9

    you accidentally said 'earned interest' when you meant 'earned income '
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
    edited 10 April 2016 at 10:28PM
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    Thanks everyone, I can only assume the gov web page is wrong then, or I've misunderstood it.

    Cheers fj
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    Thanks everyone, I can only assume the gov web page is wrong then.

    Cheers fj

    no, the government site says you pay no tax on your SAVING and not that you pay no TAX on your INCOME

    it is very easy to misread that
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
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    CLAPTON wrote: »
    no, the government site says you pay no tax on your SAVING and not that you pay no TAX on your INCOME

    it is very easy to misread that

    Absolutely correct sorry everyone.

    Personal Savings Allowance
    If your total taxable income is £17,000 or less you won’t pay any tax on your savings income.

    Cheers fj
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
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    And another point, if anyone thinks they e missed out by not knowing about this you can claim back four years.


    If you already paid tax on your savings income
    You can reclaim tax paid on your savings interest if your savings income was below your allowance. You must reclaim your tax within 4 years of the end of the relevant tax year.

    Fill in form R40 and send it to HMRC. It normally takes 6 weeks to get the tax back.

    Cheers fj
  • Ainsley1
    Ainsley1 Posts: 404 Forumite
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    Imagine people promoting ways to avoid paying tax......
    :eek:



    .:rotfl::T
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
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    Ainsley1 wrote: »
    Imagine people promoting ways to avoid paying tax......
    :eek:



    .:rotfl::T

    Brilliant! Hehehe
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