Savings Interest Income Tax 2024

Published / Last Updated on 06/04/2024

Savings Interest Income Tax 2024
(06/04/2024 to 05/04/2025)

Savings Tax Explained:

When you receive interest from a bank or building society account, it subject to income tax.


This used to be deducted at source, for example: bank interest with tax withheld but now interest is usually paid gross and you pay taxes later via your self assessment tax return.

Is there any further tax due or can I reclaim the tax if already deducted? This is not common now given most interest has no tax deduction at source.

Savings Income Tax Rates (i.e.  Bank/Building Society Interest Received)

  • Non Tax Payers and Lower 'Starting' Rate Tax Payers: *Starting Rate for Savings allowance at 0.00% tax for a lower/starting rate tax payer, can reclaim excess if deducted at 20.00% provided all income including savings income is below the £5,000.00 'starting rate' savings interest only allowance limit + personal allowance £12,570.00 or older persons age allowance (£12,570.00).
  • Basic Rate Tax Payers: Personal Savings Allowance of 1st £1,000.00 interest at 0% tax with excess interest at 20.00 % tax for a basic rate taxpayer.
  • Higher Rate Tax Payers: Personal Savings Allowance of 1st £500.00 interest at 0% tax with excess interest at 40.00% tax for a higher rate taxpayer.
  • Additional Rate Tax Payers: Zero Personal Savings Allowance so 45.00% Additional Rate Tax on all interest received for High Earners with pensions/earned income in excess of £125,140.00.

* Starting Rate Tax:  the 10% lower 'starting' tax rate was reduced to 0.00 % from 6 April 2016.  This was provided all taxable income is below a combined Personal Tax Allowance of £12,570.00  (£12,570.00 people born April 1938) and Starting Rate Tax Allowance of £5,000.00.

Investments with tax sometimes deducted at source but not usually nowadays.

  • Local Authority Bond Income
  • Corporate Bond Income
  • Permanent Interest Bearing Shares (those issued by Building Societies) 

Investments where interest is normally paid gross and taxes are due by self assessment collection.

  • Gilts Income
  • Offshore Deposit Interest

Request tax advice today.

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