Government to introduce new Personal Savings Allowance
From 6 April 2016 HM Revenue & Customs (HMRC) is introducing a tax-free Personal Savings Allowance.
This means, if you are a basic rate taxpayer you will be able to earn up to £1,000 in savings income tax free. Higher rate taxpayers will be able to earn up to £500.
The new allowance means that most people will no longer pay tax on their savings interest and your bank/building society (including us) will stop deducting tax from the interest paid on your account(s).
If you are a basic rate taxpayer and have savings income or interest of more than £1,000 (£500 for higher rate taxpayers), you will have to pay some tax on this. HMRC will normally collect the tax by changing your tax code.
If you already receive interest without tax being taken off, you will no longer need to tell us that you qualify for tax free interest.
HMRC tax rules are subject to change in the future and will depend on your individual circumstances. For more information, please visit the government website.
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