0% Starting Tax Rate Consideration
As of the 6 April 2015, the starting rate of tax on savings income has been reduced to 0%, and the starting rate band has increased from £2,880 to £5,000. The starting rate is available to people whose gross non-savings salary is less than their personal allowance plus the starting rate band. Therefore, for 2015/16 the total would be £15,600 which is the personal allowance of £10,600 + £5,000 starting rate band. This means if your total gross income is not more than £15,600, you will not have to pay tax on your savings income.
The form you would need to complete, to make the banks aware, is the reformed R85 form. This can be found on HMRC website here.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
Image courtesy of FreeDigitalPhotos.net
