Newsletter Autumn 2014

Gross interest

Someone with general income - salary, rent, pension - of up to about £13,000 may be able to pay only 10% tax on up to £2,880 of interest income, even though the bank will have deducted 20%. It's hardly worth claiming back half of a small amount.

From 6 April 2015, the maximum amount of eligible savings income goes up to £5,000, and the rate falls to zero. So taxpayers affected could get back all the tax which is deducted by the bank. Alternatively it will be possible to register in advance for the interest to be paid gross, without tax deducted.

Do this by completing the HMRC form R85, or form R105 if you live outside the UK. If your other income is covered by your tax-free allowances, this could be worth looking at. We can help you check the numbers and complete the forms.