Changes are being made to the way savings are taxed

2nd March 2016

From 6 April 2016 changes are being made to the way savings are taxed.  The new personal savings allowance means every basic-rate taxpayer can ea160302 Tax Cut - 000037539436rn £1,000 interest and higher-rate taxpayers can earn £500 interest without paying tax on it.  Additional-rate taxpayers won’t receive any personal savings allowance.

Interest from Individual Savings Accounts (ISAs) doesn’t count towards the Personal Savings Allowance because it’s already tax-free.

The changes mean that as of 6th April all banks and building societies will automatically pay gross interest on savings accounts.

Banks and building societies will give HMRC the information they need to collect any tax due through an individual’s tax code, however, if you currently complete a Self Assessment tax return you will need to continue doing so.

It is more important than ever that you keep good records so that you can check your tax code and complete your tax return accurately.