Personal Savings Allowance not deducted from income on self assessment

nilocmac

eskbanker said:

nilocmac said:

I am jumping on to this thread rather than starting a new one as it is related.  As I don't want to start another thread but can't seem to find the answer.

So when I am filling in my self assessment do I put the Savings Interest earned in my case £801 (basic tax payer) in the Taxed UK Interest or Untaxed UK Interest ?  

I can think of reasons to put it in either.  

In this context, 'taxed' means 'tax has been deducted' and (unsurprisingly!) 'untaxed' means 'tax hasn't been deducted', so the latter applies to UK interest income that's no longer taxed at source.

I think this £1000 PSA is messing with my head so I guess my thought was if I put it down as untaxed then I will have to pay tax on in but it should be tax free as there is £1000 allowance.  Or if I put it in as untaxed will it come up as 0% taxed as I am alllowed £1000 ?  

eskbanker

nilocmac said:

eskbanker said:

nilocmac said:

I am jumping on to this thread rather than starting a new one as it is related.  As I don't want to start another thread but can't seem to find the answer.

So when I am filling in my self assessment do I put the Savings Interest earned in my case £801 (basic tax payer) in the Taxed UK Interest or Untaxed UK Interest ?  

I can think of reasons to put it in either.  

In this context, 'taxed' means 'tax has been deducted' and (unsurprisingly!) 'untaxed' means 'tax hasn't been deducted', so the latter applies to UK interest income that's no longer taxed at source.

I think this £1000 PSA is messing with my head so I guess my thought was if I put it down as untaxed then I will have to pay tax on in but it should be tax free as there is £1000 allowance.  Or if I put it in as untaxed will it come up as 0% taxed as I am alllowed £1000 ?  

Savings interest (except from ISAs) is taxable income, but the PSA means that up to £1K of it is taxed at 0%, but it still all needs to be declared.

There isn't really any need to second guess how it'll work though, in that you can just enter all the data into the SA system and then, before submitting, you get to see how any tax liability is calculated.