Starter rate savings allowance £5000, a little help please...

AbbieCadabra

Can anyone please advise if I've understood this correctly as I think I might have got myself a little confused?! Thank you

2023/2024 - basic rate tax payer, £12570 salary, £1500 savings interest (non ISA) = total income £14070. 
no additional tax due? 

dividend income £18000, tax due on £17000 @ 8.75%

Dazed_and_C0nfused

AbbieCadabra said:

Can anyone please advise if I've understood this correctly as I tyhink I might have got myself a little confused?! Thank you

2023/2024 - basic rate tax payer, £12570 salary, £1500 savings interest (non ISA) = total income £14070. 
no additional tax due? 

dividend income £18000, tax due on £17000 @ 8.75%

You aren't taxed on your "salary" it is taxable pay which counts.  Which is sometimes the same as salary but quite often isn't.

But if your taxable pay is exactly £12,570 and you haven't applied for Marriage Allowance then you are correct yes, there will be no tax to pay on the savings interest although that does use up the first £1,500 of your basic rate band (the savings starter rate band sits within the basic rate band).

The first £1,000 of dividend income will also be taxed at 0% and again uses up some of your basic rate band.

The remaining £17,000 will be taxed at 8.75%.

So you have then used £19,500 of your basic rate band in total.