Extra 2% on savings ?

intalex

eskbanker said:

The ordering is going to be addressed as part of the changes:

4.117 Ordering of income tax reliefs and allowances – The government is changing income tax rules so that reliefs and allowances deductible at steps 2 and 3 of the income tax calculation will only be applied to property, savings and dividend income after they have been applied to other sources of income. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027. 

Wow, so earned income gets allocated to personal allowance first and savings income stacked at the top which virtually guarantees the 2% uplift...

mebu60

intalex said:

eskbanker said:

The ordering is going to be addressed as part of the changes:

4.117 Ordering of income tax reliefs and allowances – The government is changing income tax rules so that reliefs and allowances deductible at steps 2 and 3 of the income tax calculation will only be applied to property, savings and dividend income after they have been applied to other sources of income. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027. 

Wow, so earned income gets allocated to personal allowance first and savings income stacked at the top which virtually guarantees the 2% uplift...

Which is the plan (to target 'unearned' income on which NI is not paid).

intalex

mebu60 said:

intalex said:

eskbanker said:

The ordering is going to be addressed as part of the changes:

4.117 Ordering of income tax reliefs and allowances – The government is changing income tax rules so that reliefs and allowances deductible at steps 2 and 3 of the income tax calculation will only be applied to property, savings and dividend income after they have been applied to other sources of income. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027. 

Wow, so earned income gets allocated to personal allowance first and savings income stacked at the top which virtually guarantees the 2% uplift...

Which is the plan (to target 'unearned' income on which NI is not paid).

Makes sense, but then they should grant NI credits too for those with a certain level of savings interest within the basic rate band... worth a petition, no?