Savings Interest Income Tax 2020

Savings Interest Income Tax 2020
(06/04/2020 to 05/04/2021)

Savings Tax Explained:

When you receive interest from a bank or building society account, it is usually paid to you with a savings tax liability due of 20%.

This is either deducted at source, for example: bank interest or paid later via self assessment tax return if paid gross such as interest received in overseas bank accounts.

Is there any further tax due or can I reclaim the tax if already deducted?

• Non Tax Payers - no tax due and can reclaim if 20.00 % at source deduction already made
• *Lower 'Starting' Rate Tax Payers - 0.00 % tax is due if paid gross, can reclaim 20.00 % if 20.00 % at source deduction already made
• Basic Rate Tax Payers - 20.00 % due if paid gross or deemed paid if 20.00 % at source deduction already made
• Higher Rate Tax Payers - 40.00 % due if paid gross or 20.00 % additional tax due if 20.00 % at source deduction already made
• Additional Rate Tax Payers - 45.00 % due if paid gross or 25% additional tax due if 20.00 % at source deduction already made

* Starting Rate Tax:  the 10% lower 'starting' tax rate was reduced to 0.00 % from 6 April 2016.  This is provided all taxable income is below a combined Personal Tax Allowance of £12500  (£12500 people born April 1938) and Starting Rate Tax Allowance of £5000.

Investments with tax deducted normally at source

• Bank and Building Society Cash Deposits Interest
• Local Authority Bonds Income
• Corporate Bonds 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.