New Tax Rules on Savings

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If you have taxable salary of £100,000 and no other income you get a personal allowance of £11,500.

If you have taxable salary of £100,000 and savings interest of £200 and no other income your savings interest will be taxed at the 0% personal savings allowance rate so no tax is payable on the savings interest.

But your taxable income is £100,200 which is over the limit for full personal allowance so your personal allowance will be reduced from £11,500 to £11,400 and as a higher rate payer the tax due on your salary would increase by £40.

So your savings income could be considered "tax free" but you have paid £40 more tax from having it.

Coincidentally before all these changes the tax the banks would have deducted from £200 interest was £40