New rules on how individuals are going to receive interest from banks and building societies are being introduced from April 2016…
The new PSA PERSONAL SAVINGS ALLOWANCE is being introduced for individuals from 2016-17 onwards.
The PSA will be £1000.00 for Basic/Ordinary tax payers
£500.00 for High/upper rate taxpayers
£NIL for additional rate taxpayers
Savings income covered by the PSA will attract a zero rate of income tax. The PSA will operate in conjunction with the current 0% starting rate for savings and the £5000.00 starting rate limit.
Banks, building societies and National Savings will no longer be required to deduct basic rate income tax at source from interest they pay to their customers. So tax payers should be aware that they are receiving this interest gross and tax may be owing on it. It is crucial that this income is included in tax computations at the end of each tax year to ensure the correct amount of tax is paid after applying available reliefs as above.
Please call if you would like to discuss this or any issue. We are happy to offer a free 1 hour meeting to go over any issues or questions you have.
