20% tax on over £1k savings?

The_stingemeister

Just wondered if you earned, say, £1200 in interest on your savings accounts would you be taxed only on the £200 over the threshold of £1,000, or on the whole £1,200. In theory you would be £200 worse off it's taken from the £1200.

ColdIron

If you earn more than £17,570 then £1,000 is taxed at 0% and £200 at 20%

Dazed_and_C0nfused

The_stingemeister said:

Just wondered if you earned, say, £1200 in interest on your savings accounts would you be taxed only on the £200 over the threshold of £1,000, or on the whole £1,200. In theory you would be £200 worse off it's taken from the £1200.

You only pay tax on interest once your total taxable income exceeds either £17,310 or £18,570.

You need to factor in the Personal Allowance and any available savings starter rate band (0% tax rate).

If you only have the full savings nil rate band available you would pay,

£1,000 x 0% = £0.00
£200 x 20% = £40.00
Total tax = £40.00

The_stingemeister

Dazed_and_C0nfused said:

The_stingemeister said:

Just wondered if you earned, say, £1200 in interest on your savings accounts would you be taxed only on the £200 over the threshold of £1,000, or on the whole £1,200. In theory you would be £200 worse off it's taken from the £1200.

You only pay tax on interest once your total taxable income exceeds either £17,310 or £18,570.

You need to factor in the Personal Allowance and any available savings starter rate band (0% tax rate).

If you only have the full savings nil rate band available you would pay,

£1,000 x 0% = £0.00
£200 x 20% = £40.00
Total tax = £40.00

Thanks. My mistake, would of been £80 worse off. . But as you say it doesn't apply anyway.