Tax free earnings allowances?
A person is no longer working ( voluntarily 'retired' ) but below official retiring age, claiming no benefits etc but living on interest from savings etc. At the moment all savings interest other than ISA's seem to be paid nett i.e with 20% deducted at source for basic taxpayer....if the total annual income is less than the personal tax free allowance should I still be paying tax on interest from savings?
Public Comments
- No. look on the H M Customs and Excise web site, I think there is a form you can use to get the tax back.
- No. But they do need to contact the bank/ building society and tell them they are not a taxpayer. The bank will send out a form to complete to make such a declaration and then the interest may be paid net of tax. However the assumption is that an investor DOES pay tax, and the bank MUST be in receipt of a declaration otherwise in order to pay nett.
- it doesn`t matter who you are or how much you have got you still have to pay tax on interest from savings because the savings you have will be from wages which are taxable
- The personal allowance is currently £6,035 (for under 65s), so it depends if the total annual income from your savings exceeds this. Any amounts above £6,035 are taxed at the starting and basic rates. If your total income is below the figure above, then you are a non-taxpayer and should not pay any income tax on your savings. In this case contact your savings provider and tell you are a non taxpayer and they will send you form R85 to complete, an then interest wil be paid gross.
