Will all my savings interest be taxed at 10% next year (2008/2009). budget extract (below) suggests so.?
Will my savings interest for 2008/2009 be taxed at 10% up to the personal allowance and thereafter at 20% or will it all be taxed at 10%. extracts from 2007 budget speech are shown below :so having put in place more focused ways of incentivising work and directly supporting children and pensioners at a cost of £3 billion a year, i can now return income tax to two rates by removing the 10p band on non savings income……..……..and mr deputy speaker, i also wanna send a signal about the importance we attach to encouraging savings. so while maintaining our savings tax rate at 10p, i will extend for the 17 million men and women with isas the amount of cash that can be saved tax free from £3,000, raising it by 20 per cent in april 2008, to £3,600.
Answer
No, all bank interest is taxed at 20%, but the lower rate band of 10% can be used against savings, if you have no other income. you will have to claim back diff in rate bands. contact hmrc.
