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Tax on savings

135

Comments

  • Black_Cat2
    Black_Cat2 Posts: 558 Forumite
    Fourth Anniversary 500 Posts Name Dropper Photogenic
    edited 15 August 2022 at 3:26PM
    Thanks all.  Sorry where_are_we... didn't see your post, it's much appreciated 🐱
    Just my opinion, no offence 🐈
  • Bigwheels1111
    Bigwheels1111 Posts: 3,069 Forumite
    1,000 Posts Third Anniversary Name Dropper
    edited 15 August 2022 at 5:42PM
    Apologies esk (and ty for your response) but in my case is there a maximum amount of interest I can receive before declaring it to Hmrc? 
    10k, if you exceed this you need to fill out a tax return.
    Im in that position if rates hit 5%
  • Apologies esk (and ty for your response) but in my case is there a maximum amount of interest I can receive before declaring it to Hmrc? 
    10k, if you exceed this you need to fill out a tax return.
    Im in that position if rates hit 5%
    Show off 😊
  • xylophone
    xylophone Posts: 45,739 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Doesn't seem surprising to me that a call centre employee engaged to deal with current account issues won't be an expert on the ins and outs of taxation (which form no part of his remit and responsibility)!

     Hang on! 

    Do you need to be a tax expert to have heard of the starter rate for savings and the personal savings allowance?

    That seems much like saying that you need to be a tax expert to understand the personal allowance?

    There's such a thing as general knowledge or even  availing oneself of that esoteric tool known as Google? :)

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

    Or are you making the assumption that if somebody works in a call centre he/she must necessarily lack general knowledge?

  • xylophone said:
    Doesn't seem surprising to me that a call centre employee engaged to deal with current account issues won't be an expert on the ins and outs of taxation (which form no part of his remit and responsibility)!

     Hang on! 

    Do you need to be a tax expert to have heard of the starter rate for savings and the personal savings allowance?

    That seems much like saying that you need to be a tax expert to understand the personal allowance?

    There's such a thing as general knowledge or even  availing oneself of that esoteric tool known as Google? :)

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

    Or are you making the assumption that if somebody works in a call centre he/she must necessarily lack general knowledge?

    I wouldn't call it "general knowledge". Plenty of people do know it, but usually because they, or someone whose finances they looked at, might be affected by it. If you have a typical full time job, or not much savings, you quite likely don't. It's not talked about in headline "this is what the Budget means to you" pieces. "Doesn't seem surprising" that they don't know it does not mean "it would be surprising if they did", either.
  • xylophone
    xylophone Posts: 45,739 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    If you have a typical full time job,

    But what would this have to do with knowing about the  "starter rate for savings"? 

    I think that my original reservation about eskbanker's comment was in the idea of needing to be a "tax expert" to know about it.

  • xylophone said:
    If you have a typical full time job,

    But what would this have to do with knowing about the  "starter rate for savings"? 

    I think that my original reservation about eskbanker's comment was in the idea of needing to be a "tax expert" to know about it.

    Because most full time jobs pay you more than the amount at which the starter rate could apply.

    Yes, you did have an idea that they'd talked about 'needing to be a "tax expert"' , but that wasn't what they'd actually written.
  • jimexbox
    jimexbox Posts: 12,486 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Tbh those that frequent this forum maybe more knowledgeable as to tax liabilities than most.

    I use my partners starting saving rate for tax free savings. I'm yet to meet anyone I work with who has even heard of it. The vast majority don't know they have a personal savings allowance either. 
  • xylophone
    xylophone Posts: 45,739 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Because most full time jobs pay you more than the amount at which the starter rate could apply.

    Fair enough. But they would still (or should still) be aware of the personal savings allowance which could have a bearing on their tax affairs?

    And savings providers explain this.

    Example

    https://www.ybs.co.uk/savings/guides/the-personal-savings-allowance?cmpid=ref-00007

    This very much reminds me of the furore around the Child Benefit and higher earners  and so many claims from so many that they knew nothing about it......

    Or the women who claimed that they knew nothing about the change to state pension age.

    No doubt they, too, needed to be experts on fiscal and pensions policy.... :)

    And with regard to the starter rate for savings, more information aimed at the general public (not tax experts)

    https://www.moneyhelper.org.uk/en/savings/types-of-savings/tax-on-savings-and-investments

  • Malthusian
    Malthusian Posts: 11,055 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    The original debate was about whether a call centre grunt worker who is doing the kind of job where you have to ask permission to go for a wee could be expected to know about the starting rate band - the personal savings allowance wasn't the issue. 
    On a scale of obscurity I would say the starting rate band is around 8/10, on the same level as VCT relief. It usually only applies to a relatively small minority of retired people, with relatively low fixed pension income and relatively high taxable savings interest. 
    The personal savings allowance is more like a 5/10. For the average call centre worker to know about it (when knowing about tax isn't your job) you not only need taxable interest but to be paying enough attention to know why it might be taxable and why it isn't in your case. 
    The entire point of the personal savings allowance is so call centre workers with (at most) a few quid of savings interest income a year don't have to worry about HMRC, and HMRC doesn't have to worry about them. (Prior to George Osborne's 2016 reforms, the same purpose was accomplished by banks deducting tax on interest at source.) 
    This is very different from higher rate taxpayers feigning ignorance; if you are a higher rate taxpayer the onus falls on you to know how much tax you should be paying. If you have £10 of savings income per year then the onus still falls on you to know whether you need to fill out a self assessment form and send it to HMRC with a £2 coin sellotaped to it, but for good reason the system is designed in a way that means you are unlikely to be inadvertently evading tax if you don't bother finding out. 
    If you open a savings account there's usually nothing in the literature about the personal savings allowance (typically they just say that interest is paid gross and that's it). There's no particular reason you would read through the bank's whole website until you came across their page explaining it.
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