Who can get tax-free savings interest?
Banks and building societies usually deduct 20 per cent tax from the interest they pay on most types of savings account. But if your total taxable income is less than your tax-free Personal Allowance (and any Blind Person’s Allowance if you receive this) then you can: • register to get savings interest paid tax-free • claim back any tax you’ve paid unnecessarily Taxable income includes money you earn from a job. But it excludes money you get from certain benefits and some other sources. Your Personal Allowance is the amount of income you can get tax-free and depends on your age and circumstances. If you only pay a small amount of Income Tax If your taxable income is only slightly higher than your tax-free allowance(s) then some or all of your savings interest may be taxable at 10 per cent – the ‘starting rate for savings’. If this applies to you, you’ll probably be able to claim some tax back if it’s been deducted from your interest. The amount you can reclaim is the difference between
