*The Commerce Journal>>>United Kingdom Taxes

New tax year the 10p starting savings rate?

the new rate for savings is 10p in the pound for the first 拢2232.00.Some people will get it some will not.My income is under the personal yearly allowance so I do not pay tax.Now would I get the 10p savings rate on my savings because of this?
Thank you Scotty

I think you have some things muddled up here.
Firstly INCOME TAX
Last year, income tax on the first 拢2230 that you earned after your personal allowance - was taxed at 10p in the pound.

So if your personal allowance was 拢5225 for example, then you pay no tax on this amount, then 10p in the pound on earnings from 拢5226 to 拢7455, then the basic rate on earnings above 拢7455.

this 10p rate has been abolished for this tax year 2008/9

When it comes to savings, tax is charged on any interest you earn. So if you have some money in the Building Society and it earns you 拢100 in interest for the year - then the building society will only pass on 拢80 to you, because the tax rate is 20% and this is deducted and passed on to the government on your behalf. If you are a non-taxpayer then you can fill in a form and make a declaration that will pay yor interest in full - ask your savings institution for more info.

Finally dividends on shares - have had10% tax already deducted (just like the building society example above) before the dividend is passed on to you.

Hope this clears a few things up.

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