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Close to higher rate already and interest over £1000

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newfoundglory
newfoundglory Posts: 1,912 Forumite
Part of the Furniture 1,000 Posts Combo Breaker
edited 5 December 2016 at 11:26PM in Cutting tax
Hi all.

I was earning less than 39k per year until August, but a rise in pay has taken me to just over the higher rate of 43k per year.

I had long-held savings accounts which were paying above the normal rates and so I estimate I will receive approx £2300 in gross interest up until April (e.g. Santander 123, 4-year Nationwide regular saver, fixed bonds etc)

With interest now being paid gross, I am concerned that i will either end up paying 20% of 1300 (£260) or 40% of 1800 (£720) of this in tax if I do not act (unfortunately I have already used my cash ISA allowances and so there is nothing I can do about this and these are not included in the 2k)

I have to admit I do not know what my end of year position might be, what my current pension contributions are (maybe around £130-140 per month), or if I can make one off overpayments - or even if this is the correct thing to do.

I would be grateful for some suggestions as to what calculations and actions I should be taking.

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