Personal Savings Allowance

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  • RG2015
    RG2015 Posts: 5,755
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    I have inserted various scenarios on the tax calculator, and it does appear to give incorrect results at certain levels.

    For example.

    Income eg salary, £12,570
    UK Interest received, £3,000
    Total earnings, £15,570
    Tax deducted at source, £600 (£3,000 @ 20%)
    Untaxed UK interest, £0

    Result, you may be due a refund of £280

    I would have expected that a refund of £600 may be due. 

  • RG2015 said:
    I have inserted various scenarios on the tax calculator, and it does appear to give incorrect results at certain levels.

    For example.

    Income eg salary, £12,570
    UK Interest received, £3,000
    Total earnings, £15,570
    Tax deducted at source, £600 (£3,000 @ 20%)
    Untaxed UK interest, £0

    Result, you may be due a refund of £280

    I would have expected that a refund of £600 may be due. 

    What calculator?  Do you have a link?
  • JGB1955
    JGB1955 Posts: 3,437
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    RG2015 said:
    I have inserted various scenarios on the tax calculator, and it does appear to give incorrect results at certain levels.

    For example.

    Income eg salary, £12,570
    UK Interest received, £3,000
    Total earnings, £15,570
    Tax deducted at source, £600 (£3,000 @ 20%)
    Untaxed UK interest, £0

    Result, you may be due a refund of £280

    I would have expected that a refund of £600 may be due. 

    There wouldn't have been any tax taken off the UK interest... so no tax deducted at source and no refund due.
    #2 Saving for Christmas 2024 - £1 a day challenge. £131 of £366
  • Atwill said:
    Have you read the HMRC tax calculation stating £200 tax is due on £1000 of interest, when Mr Lewis clearly states I could earn £2000 of interest without tax? 
    Have you posted that calculation somewhere? 

    The one I can see from 11:44am today shows £1,000 x 0% = £0.00.
  • RG2015
    RG2015 Posts: 5,755
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    edited 11 July 2022 at 12:23PM
    RG2015 said:
    I have inserted various scenarios on the tax calculator, and it does appear to give incorrect results at certain levels.

    For example.

    Income eg salary, £12,570
    UK Interest received, £3,000
    Total earnings, £15,570
    Tax deducted at source, £600 (£3,000 @ 20%)
    Untaxed UK interest, £0

    Result, you may be due a refund of £280

    I would have expected that a refund of £600 may be due. 

    What calculator?  Do you have a link?
    As per @Atwill

    https://stccalculator.hmrc.gov.uk/UserDetails.aspx
  • RG2015
    RG2015 Posts: 5,755
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    JGB1955 said:
    RG2015 said:
    I have inserted various scenarios on the tax calculator, and it does appear to give incorrect results at certain levels.

    For example.

    Income eg salary, £12,570
    UK Interest received, £3,000
    Total earnings, £15,570
    Tax deducted at source, £600 (£3,000 @ 20%)
    Untaxed UK interest, £0

    Result, you may be due a refund of £280

    I would have expected that a refund of £600 may be due. 

    There wouldn't have been any tax taken off the UK interest... so no tax deducted at source and no refund due.
    The poster @Atwill has stated that tax was deducted at source, for whatever reason.
  • Atwill
    Atwill Posts: 21
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    To prove my point about this huge misunderstanding about interest allowances, according to Mr Lewis MSE web, I could earn £2000 in interest tax free based on an income of £16,570.

    According to HMRC calculator I should pay £1000 tax instead of £800, an overcharge of £400.

    Can I please get some further confirmation from other savers using this forum that HMRC are ripping us off?
  • Atwill
    Atwill Posts: 21
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    Correction to tax overcharge should be £200 - sorry.
  • RG2015
    RG2015 Posts: 5,755
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    Atwill said:
    To prove my point about this huge misunderstanding about interest allowances, according to Mr Lewis MSE web, I could earn £2000 in interest tax free based on an income of £16,570.

    According to HMRC calculator I should pay £1000 tax instead of £800, an overcharge of £400.

    Can I please get some further confirmation from other savers using this forum that HMRC are ripping us off?
    The tax calculator appears to be giving erroneous results. It also concerns me that my browsers advise that the calculator site is not secure.

    As this point I do not see anyone being ripped of by HMRC. You do however have an issue with HMRC that needs to be resolved to your satisfaction.

    I would suggest posting some basic details here of what HMRC have advised you in writing.
  • Jeremy535897
    Jeremy535897 Posts: 10,382
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    There is clearly confusion here. Let me try to simplify. If your earnings are below £18,570, both the £5,000 starter rate and the personal savings allowance apply. These have the potential to give you a 0% tax rate on up to £6,000 interest, but the problem you have is that your interest is only £1,000, so that's all you can use. Hence your tax bill is £16,570 earnings plus £1,000 interest less personal allowance £12,570 less personal savings allowance £1,000 = £4,000 at 20% = £800.
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