As a higher-rate taxpayer, you are entitled to a personal savings allowance of £500. This means that £500 of your interest income is tax-free. The remainder of your interest income will be taxed at your usual tax rate. As a higher rate taxpayer this is 40% in England, Wales and Northern Ireland and 42% in Scotland.
If you prepare a self-assessment income tax return you will need to ensure you report all your savings income, the tax payable on your savings income will then be included in your tax liability.
If you have any accountant who prepares your tax return, provide them with details and evidence of the interest you received. You may have received an annual interest declaration from your savings provider which covers the tax year, which is perfect.
Date published 15 Nov 2023This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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