Tax for Individuals / July 6th 2016

Personal Savings Allowance

Some of us may have thought that the chancellor was in a good mood when he introduced the Personal Savings Allowance (PSA). The Government predicts that the measure will result in 95% of taxpayers not having to pay any tax on their savings income. As a result of the introduction of the PSA, banks and building societies will pay interest gross. The Government expects the average tax saving per person per year to be £25. With effect from 6 April 2016 depending on whether you are a basic rate tax payer (taxable income less than £43,000) or a high rate (taxable income up to £150,000) then you can earn a certain level of income on your savings tax free. For basic rate tax payers the amount is £1,000 and for high rate tax payers this is £500. If your taxable income is less than £17,000 then you will not pay tax on any savings income. What’s included: (more…)

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