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  • FIRST POST
    • MSE Helen S
    • By MSE Helen S 2nd Apr 15, 4:26 PM
    • 75Posts
    • 44Thanks
    MSE Helen S
    Tax Free Savings Guide
    • #1
    • 2nd Apr 15, 4:26 PM
    Tax Free Savings Guide 2nd Apr 15 at 4:26 PM
    Hi!

    This is the discussion thread for the



    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.


    Thanks folks,


    MSE Helen
Page 2
    • nettymes
    • By nettymes 28th Jul 15, 9:33 PM
    • 24 Posts
    • 8 Thanks
    nettymes
    Personal Savings Allowance
    I have been trying to get my head round this because my father in law is looking to reinvest a bond which matures next month. I have looked at the 2015 budget and I think that the Tax Free Savings Guide Article is wrong where it says:

    'Then, from next April, the personal savings allowance will supersede these tax-free savings rules, BUT anyone who still qualifies then under these tax-free savings rules will get a higher £2,000 personal savings allowance for that year, instead of the £1,000 that will apply for other basic-rate taxpayers.'

    I think that the £5000 savings interest allowance will still apply in April 2016 if your non-savings income is below £15600. It won't be superseded by the Personal Tax Allowance. So if you earn £10600 you can still get £5000 tax-free savings income as now plus a further £1000 tax-free savings income from April 2016 making £6000 tax-free in total. This is clear from the diagram on page 57 of the 2015 budget:
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/416330/47881_Budget_2015_Web_Accessible.pdf

    I don't know where the £2000 figure mentioned in the original article comes from. Have I understood this correctly?
  • David T B
    Thanks colston.
    Im confused as when I checked my paperwork every year I get a "Consolidated Tax Certificate".
    Last years says: Dividend paid £404.22 Tax Credits £44.86.
    At the bottom it says "The original tax credit certificate of deductions of income tax will when required be lodged with HMRC.
    What is the Tax Credit referring to?
    Originally posted by Tabatha Kitten
    The "Tax Credit" refers to the "notional" tax on your UK dividends. It will be one ninth of the amount you actually received. (there might be a few pence difference to allow for part pence in multiple calculations) I believe you were actually wondering if you could get this amount refunded if you're below the tax paying threshold. The answer is a simple "NO" although if you were a tax payer you might have to pay more to fetch it up to the tax due. (That's the main reason why HMRC are informed)
  • lward88
    Nationwide not playing ball
    Just called to register for low-income tax-free savings for the period from now up until April 2016, and they had no idea what I was talking about. Two managers consulted and still they were baffled. Anyone had any problems with this? Thanks.
    • le loup
    • By le loup 17th Aug 15, 4:50 PM
    • 3,907 Posts
    • 3,955 Thanks
    le loup
    Just called to register for low-income tax-free savings for the period from now up until April 2016, and they had no idea what I was talking about.
    Originally posted by lward88
    and neither do I. Do you mean you want an R85 because you are a non-tax payer?
    • ceredigion
    • By ceredigion 17th Aug 15, 9:14 PM
    • 3,450 Posts
    • 4,912 Thanks
    ceredigion
    Just called to register for low-income tax-free savings for the period from now up until April 2016, and they had no idea what I was talking about. Two managers consulted and still they were baffled. Anyone had any problems with this? Thanks.
    Originally posted by lward88


    called who
    • Archi Bald
    • By Archi Bald 17th Aug 15, 9:40 PM
    • 9,376 Posts
    • 7,432 Thanks
    Archi Bald
    called who
    Originally posted by ceredigion
    Nationwide, apparently: http://forums.moneysavingexpert.com/showthread.php?t=5307536
    • oly2c
    • By oly2c 7th Sep 15, 8:07 AM
    • 51 Posts
    • 13 Thanks
    oly2c
    Tax Return
    I have an income high enough to pay tax but well within the higher tax limit. I am not required to fill in an annual return as tax is taken from my pension in accordance with my tax code and my savings income is taxed before receipt.
    In order to obtain the April 2016 Tax free Savings allowance will I now have to fill in a tax return?
    if i had known then what i know now
    • Archi Bald
    • By Archi Bald 7th Sep 15, 10:19 AM
    • 9,376 Posts
    • 7,432 Thanks
    Archi Bald
    I have an income high enough to pay tax but well within the higher tax limit.
    Originally posted by oly2c
    What do you mean? Are you a basic rate or a higher rate tax payer?

    I am not required to fill in an annual return as tax is taken from my pension in accordance with my tax code and my savings income is taxed before receipt.
    In order to obtain the April 2016 Tax free Savings allowance will I now have to fill in a tax return?
    Originally posted by oly2c
    If you are presently a higher rate tax payer, you will already have to declare your savings income to the HMRC as additional tax is due. The banks currently only automatically withhold tax at basic rate. Your tax code may or may not reflect any additional tax due on your savings interest - you need to check this with the HMRC.

    Full details have yet to be announced yet for the changes coming into force in April 2016.

    If you are either
    • a BR tax payer, and you receive less than £1,000 interest per year, or
    • a HR tax payer, and you receive less than £500 interest per year,
    you should not have to do anything post April 2016.

    If you earn more than £1,000/£500 interest, you will have to pay additional tax somehow - how exactly will be announced later. There is oodles of time for further details to be made available. It is possible that we will have our new Personal Tax Accounts available by then.
    • lamanva
    • By lamanva 17th Sep 15, 8:13 AM
    • 13 Posts
    • 0 Thanks
    lamanva
    tax free savings
    my wife's income is less than £15600.

    Each year i claim a refund on her tax. Will she lose out if i do this at the end of this tax year rather than taking advantage of the new rules, albeit getting the benefits later
    • lamanva
    • By lamanva 17th Sep 15, 8:23 AM
    • 13 Posts
    • 0 Thanks
    lamanva
    Tax free savings
    My wife, a pensioner earns less than £15600. She usually claims a refund on savings interest at the end of the tax year. This seems to work well.
    Will she lose out if she does this this year rather than taking advantage of the tax new tax arrangements for this year, albeit getting income later

    thanks
    • eskbanker
    • By eskbanker 17th Sep 15, 12:40 PM
    • 11,423 Posts
    • 14,181 Thanks
    eskbanker
    Interest received during this tax year is subject to the rules applying for this tax year.

    Interest received in the next tax year is subject to the rules applying for the next tax year.

    In other words, the same tax/refund would be due regardless of the timing of the claim.
    • Vortigern
    • By Vortigern 17th Sep 15, 1:25 PM
    • 2,818 Posts
    • 1,947 Thanks
    Vortigern
    My wife, a pensioner earns less than £15600. She usually claims a refund on savings interest at the end of the tax year.
    Originally posted by lamanva
    If your wife's total income, including savings interest, is less than £15,600 she can get the tax back now by using form R85. Why wait?

    https://www.gov.uk/government/publications/income-tax-get-interest-without-tax-taken-off-r85-from-6-april-2015
    • bb1942
    • By bb1942 1st Feb 16, 7:01 PM
    • 13 Posts
    • 5 Thanks
    bb1942
    I know this is an old thread but I have just tried to register with my bank, Santander, and been told that it doesn't come into effect until April 2016 and even then the details are not settled! Has anyone had any luck with their bank?
    • Archi Bald
    • By Archi Bald 2nd Feb 16, 11:33 AM
    • 9,376 Posts
    • 7,432 Thanks
    Archi Bald
    I know this is an old thread but I have just tried to register with my bank, Santander, and been told that it doesn't come into effect until April 2016 and even then the details are not settled! Has anyone had any luck with their bank?
    Originally posted by bb1942
    What exactly were you trying to register?
    • kayen
    • By kayen 3rd Feb 16, 12:02 PM
    • 17 Posts
    • 5 Thanks
    kayen
    Santander - PSA
    I called Santander today about the new Personal savings allowance coming in 6 April and its bearing on interest earnings from the 123 account- they said as the 123 account is a current account-not a savings account- the PSA is not applicable and that interest for basic rate payers will still be applied....is this correct?
    My reading of the information was that the PSA applies to ANY interest received, regardless of what type of account or savings vehicle it comes from....any thoughts?
    • veryintrigued
    • By veryintrigued 3rd Feb 16, 12:32 PM
    • 2,816 Posts
    • 2,393 Thanks
    veryintrigued
    I called Santander today about the new Personal savings allowance coming in 6 April and its bearing on interest earnings from the 123 account- they said as the 123 account is a current account-not a savings account- the PSA is not applicable and that interest for basic rate payers will still be applied....is this correct?
    My reading of the information was that the PSA applies to ANY interest received, regardless of what type of account or savings vehicle it comes from....any thoughts?
    Originally posted by kayen
    That's poppycock you are correct.

    What an incompetent advisor.

    I'd be raising a complaint such that this advisor doesn't spread her lack of knowledge further.
    • colsten
    • By colsten 3rd Feb 16, 4:00 PM
    • 11,061 Posts
    • 10,356 Thanks
    colsten

    I'd be raising a complaint such that this advisor doesn't spread her lack of knowledge further.
    Originally posted by veryintrigued
    Absolutely.
    • frank777
    • By frank777 3rd Feb 16, 4:36 PM
    • 294 Posts
    • 136 Thanks
    frank777
    Early bird catches the worm?
    Another reason to get your savings interest without tax taken off this Tax Year

    ''Then, from next April, the personal savings allowance
    (http://www.moneysavingexpert.com/savings/personal-savings-allowance) will supersede these tax-free savings rules, BUT anyone who still qualifies then under these tax-free savings rules will get a higher £2,000 personal savings allowance for that year, instead of the £1,000 that will apply for other basic-rate taxpayers'' MSE 14.07.15

    Has this been superseded or does it still apply - or are the powers that be keeping people in the dark now
    • colsten
    • By colsten 3rd Feb 16, 6:25 PM
    • 11,061 Posts
    • 10,356 Thanks
    colsten
    Another reason to get your savings interest without tax taken off this Tax Year
    Originally posted by frank777
    The only thing that counts is the actual amount of money you can make from interest. The simple fact that you get paid interest without tax taken off doesn't mean it is your best option. Paying tax on a 5% account is vastly preferable to an account that pays 1.5% tax free.

    ''Then, from next April, the personal savings allowance
    (http://www.moneysavingexpert.com/savings/personal-savings-allowance) will supersede these tax-free savings rules, BUT anyone who still qualifies then under these tax-free savings rules will get a higher £2,000 personal savings allowance for that year, instead of the £1,000 that will apply for other basic-rate taxpayers'' MSE 14.07.15

    Has this been superseded or does it still apply - or are the powers that be keeping people in the dark now
    Originally posted by frank777
    I think I have seen the mentioned before, and nobody on the forum knew anything about a £2,000 allowance.
    • frank777
    • By frank777 3rd Feb 16, 7:38 PM
    • 294 Posts
    • 136 Thanks
    frank777
    colsten - ''The only thing that counts is the actual amount of money you can make from interest. The simple fact that you get paid interest without tax taken off doesn't mean it is your best option. Paying tax on a 5% account is vastly preferable to an account that pays 1.5% tax free''

    Each to their own: Magpie - collecting all the bank accounts available or Squirrel - Tesco Internet Saver 1.01 Gross - including a fixed 0.26% bonus for 12 months

    I'll go and suck some eggs and gather some nuts too?
    Maybe MSE Helen Saxon has the answer - she started it off!
    Last edited by frank777; 03-02-2016 at 7:46 PM.
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