Interest On Savings Accounts

[Bazile]

Do building societies deduct tax when paying  interest on  savings accounts ?

[TheWinner]

no

[barry1010]

They used to take the tax off but haven't done for around 10 years 

[gingejbee]

...but HMRC gets to know how much interest you're getting.

[barry1010]

Yes, they all notify HMRC

[Old_Geezer]

Well I've learnt something new today then. (Not that I've had much interest in such saving accounts ever since the interest rate has become vanishingly small.)

[Bazile]

I understand you can earn up to £1000 in savings interest , without declaring it to HMRC , if you're a basic rate taxpayer .

Is that correct ?

[TheWinner]

https://www.gov.uk/apply-tax-free-interest-on-savings

[237SJ]

Yes, if you are a basic rate taxpayer you can earn up to £1000 interest on savings accounts.

[237SJ]

Meant to say - without paying tax. 

[TheWinner]

do you do a self assesment tax return?

[237SJ]

Over that you declare it via self assessment

[Bazile]

Thanks all 

From the link - from the Winner  - under 'tax rates and bands ' England NI / Wales '

' Income after allowances 2024 to 2025'

Why are there no figures ?

[barry1010]

I can't tell which part of the link you are referring to

[Bazile]

Apologies 

Open link then go down to 'personal savings allowance ' - then click on the 'income tax bands ' indent 

[TheWinner]

https://www.moneysavingexpert.com/savings/personal-savings-allowance/

[Bazile]

Does money received from family members as 'keep' count as income for tax purposes ?

[New Judge]

Yes, basic rate taxpayers can earn £1,000 in interest without paying tax.

However. if you have a particularly low income, you can earn up to an additional £5,000 in interest tax free. 

If your other (pay or pension) income is £12,570 or less you can take advantage of the full £5,000. If your other income is £17,570 or more you have no additional interest allowance. If it is somewhere between the two, the £5,000 is reduced by £1 for every £1 above £12,570 you have in other income.

As an example, if your other income is £16,000 your additional tax free inerest allowance is reduced by (£16,000 - £12,570) with equals £3,430. So your additional tax free allowance is (£5,000 - £3,430) which equals £1,570. This is in addition to the normal tax free aamount of £1,000, so you can earn £2,570 in interest without paying tax.   

[Bazile]

Thanks all

[barry1010]

I don't think the links mention that some state benefits don't count as income. It may be important and includes Attendance Allowance, Bereavement support payment, Child Benefit (income-based), Disability Living Allowance, Housing Benefit, Personal Independence Payment, and Winter Fuel Allowance