The Personal Savings Allowance means most people no longer pay tax on their savings income.
- If you are a basic rate taxpayer, you can earn £1,000 of interest without paying tax.
- If you are a higher rate taxpayer, you can earn up to £500 of interest without paying tax.
- If you are an additional rate taxpayer (45%) you don’t get an allowance.
Interest from ISAs does not count towards your Personal Savings Allowance because it’s already tax free.
If you have savings income over your Personal Savings Allowance, you are responsible for making sure you are paying the correct tax directly to HM Revenue & Customs.
For further information please visit Gov.uk