New tax breaks on savings

Up until April 2015, savings interest was taxed at 20% for the first £31,865 with £2,880 of this taxed at the lower “starting” rate of 10%. In the 2014 Budget, it was announced that from April 2015, the starting rate would be eliminated and instead savings income would be taxed at 0% for the first £5,000. It is expected to help over one million savers to save tax and another half a million to claim back at least some tax on savings income. The government is introducing these incentives to encourage saving again after this mechanism of investment has taken a real hit in recent years due to the incredibly low rates of interest. Those who earn less than £15,600 in total taxable income per year can receive the savings income tax free direct from their bank or building society. Just complete Form R85 and submit direct with your bank. For those with a higher taxable income there may be a chance to still claim back a proportion. Review your situation using the HMRC calculator and claims can be made either via your personal tax return or though a specific Form R40. Figurit help many commercial business owners and their spouses or civil partners with tax affairs, including providing guidance on tax breaks. Call today for a friendly chat. T: 020 7376 9333 E: info@figurit.com