Paying Tax On Savings - What's This About?

Former Member

I got a statement this morning from my bank, showing the activity for my savings account.

On the second page it says:

if you wish to reclaim tax deducted, the Inland Revenue will require a Tax Deduction Certificate which your branch will be pleased to supply.

TAX YEAR April 2008 - 5 April 2009

Gross Interest Interest (tax) £26.16
Tax Deducted £5.22

Net Interest Paid £20.94

What is all this about?

Former Member

Savings interest is treated as income, and is usually taxed at the Basic Rate.

If you don't pay tax then you can get a form from your bank to fill in which will stop them deducting tax in the first place from now on.

If you don't pay tax and you want the money bank then you get the certificate from the bank and get in touch with HMRC and they will (eventually) refund it.

Former Member

:yes: to what Scary Monster said

If your a non-taxper you can fill in a R85 and recieve the interest tax free.

Interest earnt on ISA accounts is tax-free regardless of your cirmcumstances.

Former Member

Thanks you two.