Tax code change by Savings income

bdotl

Hi,
I live in Scotland and have the following query I hope someone can answer.

I earn £43000 per year and have made approx £5000 in savings interest over and above this. I know the savings income is calculated on the English tax rates so as long as my combined income and savings is under £50270 I won’t enter the higher rate tax bracket.
My question:
The following year HMRC will deduct £4000 from my tax code (£5000 minus my £1000 allowance) as they look at the previous year and assume it will be the same. This will change my tax code from S12570 to S8570.

Higher rate tax in Scotland starts at £43663, after my tax code change this would be £39663 and I earn £43000. Will I fall into the higher rate tax band with my job?
Thank you for any help given

Dazed_and_C0nfused

bdotl said:

Hi,
I live in Scotland and have the following query I hope someone can answer.

I earn £43000 per year and have made approx £5000 in savings interest over and above this. I know the savings income is calculated on the English tax rates so as long as my combined income and savings is under £50270 I won’t enter the higher rate tax bracket.
My question:
The following year HMRC will deduct £4000 from my tax code (£5000 minus my £1000 allowance) as they look at the previous year and assume it will be the same. This will change my tax code from S12570 to S8570.

Higher rate tax in Scotland starts at £43663, after my tax code change this would be £39663 and I earn £43000. Will I fall into the higher rate tax band with my job?
Thank you for any help given

I think it will be slightly more complicated than that as a Scottish tax code means your employer can only use the Scottish tax tables  provided by HMRC.  Which will mean 19%, 20%, 21% and 42% in your situation.

But the deduction in your tax code should be set at such a level so that the tax deducted matches what you need to pay.  So it could well be you have a smaller deduction than £4,000 but then part of your earnings are taxed at the Scottish higher rate.

A key thing to do is make sure HMRC have as accurate and estimate or your earnings as possible.  They usually use the latest Real Time Information data from your employer to estimate this but you can provide an update via your Personal Tax Account if you have a more accurate estimate.