We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
New rate of tax on interest from April 2027
Comments
-
"Reducing the personal savings allowance by £10 might generate far more tax income (and be far easier to implement!) but that's a noticeable change that will affect most people very obviously in their monthly payslip and therefore will generate bad print headlines and make the 6pm News. Whereas a 2% increase on 'higher rate' taxpayer savings interest income is niche and fiddly enough to stay away from attention and airtime."
I'm a bit confused what you mean by this. The personal savings allowance applies to interest, so reducing it would be at least as stealthy than the 2% increase in basic and higher rate tax on interest, since it would end up buried in a HMRC tax calculation for many who might not even recognise they were paying any more.
Reducing the PSA from £1000 to £990 and from £500 to £490 would presumably raise a lot less than increasing the rate from 20% to 22%, from 40% to 42%, and from 45% to 47%. Reducing PSA would not inconvenience additional rate taxpayers at all, since theirs is already zero.
1 -
Me too until it was mentioned on here a couple of days ago. The govt did a good job of slipping it under the radar!
0 -
Really? Seemed to be well-publicised everywhere I've looked. For example:
Also
I guess some of the media may have been fixated on changes happening sooner.
3 -
It was also the subject of a multi-page thread on this board at the time of the budget, albeit one initially lacking in clarity when being posted at the same time as the announcement!
0 -
It wasn't buried, it was in the speech. My bold:
"Currently, a landlord with an income of £25,000 will pay nearly £1,200 less in tax than their tenant with the same salary…
…because no National Insurance is charged on property, dividend or savings income.
It’s not fair that the tax system treats different types of income so differently…
…and so I will increase the basic and higher rate of tax on property, savings and dividend income by 2ppts…
…and the additional rate of tax on property and savings income by 2ppts.
Even after these reforms 90% of taxpayers will still pay no tax at all on their savings. "
https://www.gov.uk/government/speeches/budget-2025-speech
4 -
OK OK I missed it. If I were 40 years younger I'd say "my bad". (Edit: actually I very much hope I wouldn't.)
4 -
Exactly, thank you. Delayed, for precisely the reason you state.
I can see further in the thread that someone has answered my opening question. That rate of tax is charged in the year it was earned not in the year you pay.
Thanks!
0 -
Its not gonna make that much difference to some of us, perhaps a few hundred quid extra on savings.
0 -
On the broad subject of money taken from us, this will give you a laugh. I just phoned Interactive Investor to say I want to sell my full holding in a fund, it is over £100k, and since I do not want to pay the £40 fee for transactions over £100k would their platform allow me to split it and place two trades for the same fund for the same valuation point. They said i) they have just increased the limit from £100k to £500k so the problem no longer exists and ii) since the £40 is a charge to cover the cost of the transaction “the FCA could very well consider it market manipulation”.
0 -
I did not miss it, but forgot all about it. Maybe something I would not have done 40 years ago…..
0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.6K Banking & Borrowing
- 254.5K Reduce Debt & Boost Income
- 455.5K Spending & Discounts
- 247.5K Work, Benefits & Business
- 604.4K Mortgages, Homes & Bills
- 178.6K Life & Family
- 261.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards