Personal Savings Allowance and tax thresholds

foofi22

Hi

Got a question about savings interest that pushes me into the higher rate bracket.

Last year I used salary sacrifice to bring all my income from my job into basic rate. My gross income was £50264

I also got £323 of interest from savings.

How is my income taxed? i.e. what should I be paying.

Various sources are saying I would be taxed at 40% on the £317 above the higher rate threshold but that seems illogical to me because I'm being taxed on all my savings interest.

Dazed_and_C0nfused

foofi22 said:

Hi

Got a question about savings interest that pushes me into the higher rate bracket.

Last year I used salary sacrifice to bring all my income from my job into basic rate. My gross income was £50264

I also got £323 of interest from savings.

How is my income taxed? i.e. what should I be paying.

Various sources are saying I would be taxed at 40% on the £317 above the higher rate threshold but that seems illogical to me because I'm being taxed on all my savings interest.

I don't know what you mean by gross income.  Whatever it is it though won't be relevant for tax purposes.

What was your taxable income?  

Was it £50,264 earnings + £323 savings interest?

We're you on the standard emergency code of 1257L?

Is there anything else relevant you haven't mentioned?

foofi22

Yes £50264 earnings and £323 savings interest.

Tax code was 1257L

I don't know of anything else relevant but then I'm not a tax expert.  I haven't received anything from HMRC about my 24/25 tax, I was just trying to work it out for myself

Dazed_and_C0nfused

foofi22 said:

Yes £50264 earnings and £323 savings interest.

Tax code was 1257L

I don't know of anything else relevant but then I'm not a tax expert.  I haven't received anything from HMRC about my 24/25 tax, I was just trying to work it out for myself

The interest will all be taxed, but at 0%.

So based on your info you will have a liability of £7,538.80.

How much PAYE tax was deducted?  £7,537 by any chance?

foofi22

I didn't write the tax figure down so I don't have to hand. I recall it was £753x (I can't remember the x)

Thanks for your help.  This is the only "calculator" online I could find that includes both earned income and savings interest. https://www.pie.tax/tax-calculator/income-tax

Dazed_and_C0nfused

foofi22 said:

I didn't write the tax figure down so I don't have to hand. I recall it was £753x (I can't remember the x)

Thanks for your help.  This is the only "calculator" online I could find that includes both earned income and savings interest. https://www.pie.tax/tax-calculator/income-tax

If you are that close to the liability then you wouldn't normally be asked to pay the difference so you might never hear anything from HMRC.