How much interest allowed on savings with tax-free job?

jf22901

Hi everyone,

I'm new to the forum, and have a query about tax on savings. Apologies if this is the wrong forum to post my question.

Basically, I work for an inter-governmental organisation and we do not pay any tax on our earnings. (HMRC were informed of this when I started my job.) I have been trying to determine how much I am allowed to make in interest on my savings/investments, since I'm not a low or high rate tax payer. I asked HR at work, but they are not allowed to give any advice. All they will confirm is that my salary does not count at all as taxable income, and provided me with a link to a gov.uk webpage. (This forum won't let me include the link.)

Can anyone provide any advice? As far as I can work out I have a personal allowance of £12,570, and as I don't earn any taxable pay from my job, I should be able to earn £12,570 in interest? (Although I don't have enough money in the bank for this to be true!!)

Thanks in advance!

Jack

lindabea

If your salary is not regarded as taxable income, then you still have your personal allowance of 12570 still unused and can be used to offset other income(such as a second job), you will also have £1000 PSA and £5000 starter rate of savings, making a potential total of  £18570 of allowances

Dazed_and_C0nfused

But it's in a strict order 

You use your spare Personal Allowance first, all of it from what you've posted 

Your Personal Allowance would only be £11,310 if you have applied for Marriage Allowance.

Then the next £5,000 would be taxed at 0% (the savings starter rate band).

And only after is used would you be able to utilise the £1,000 savings nil rate band (interest also taxed at 0%).

Keep_pedalling

The wording on the starting savings starter rate talks about other income rather than taxable income, so is it still applicable if you get  £20k income from ISAs or £80k working for the UN?

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

As usual HMRC guidance is not that clear.

Dazed_and_C0nfused

Keep_pedalling said:

The wording on the starting savings starter rate talks about other income rather than taxable income, so is it still applicable if you get  £20k income from ISAs or £80k working for the UN?

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

As usual HMRC guidance is not that clear.

Assuming you had adhered to the ISA rules then interest from an ISA is tax exempt so totally irrelevant.

Earnings from the UN would depend on whether they are taxable or not.  If atx exempt for some reason then again irrelevant.

If it's taxable then £80k would have used the Personal Allowance and £5,000 of the basic rate band so no savings starter rate band would be available.

jf22901

Sorry for the late response, I've been away for a while. Thanks to everyone who replied though. It's a great help!