Your Personal Savings Allowance is the total amount of interest you can earn in a tax year without paying tax. If you're a basic rate tax-payer, your Personal Savings Allowance is £1,000. If you're a higher rate tax-payer it is £500. If you earn £150,000 or more you won't have a Personal Savings Allowance.
HMRC will normally collect the tax by changing your tax code. Banks and building societies will give HMRC the information they need to do this. If you fill in a Self-Assessment tax return you should carry on doing this as normal.
On 6 April 2016 the Government changed the regulations, so that from that day we must no longer deduct tax from the interest earned on your account. Depending on your circumstances, you may still be liable to pay income tax on your interest. For more information or guidance on whether you are liable to pay tax on the interest earned on your account you can contact HMRC directly. Learn more
You only need to pay tax on any interest you earn above your Personal Savings Allowance. You are responsible for making sure you're paying the correct tax. Since 6 April 2016 banks and building societies no longer deduct tax from interest earned on savings and current accounts. Any tax due on your interest is paid directly to HMRC. If you are unsure whether you are required to pay tax please contact HMRC on their website.
Yes. It affects everyone with a non-ISA savings or current account that pays credit interest.
Since 6 April 2016, everyone with savings or current accounts in the UK has had the interest paid gross (without tax taken off) and is responsible for paying any tax they owe on the interest.
No. You can still save up to your annual ISA subscription limit per tax year. Your Personal Savings Allowance covers the interest you earn on all your non-ISA accounts with all banks and building societies as this is already tax free.