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Savings Allowance utilizes Basic Rate Band

Does interest which is covered the the PSA, use up any of the Basic Rate Band?

I have received conflicting advice and tax calculations recently (HMRC etc), regarding whether the personal savings allowance uses up the basic rate band (the same as the dividend allowance)? I am sure I have been calculating the Savings allowance correctly but I am now doubting myself - Probably something to do with the last week before christmas....

Thank you in advance for your comments.

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17th Dec 2018 14:04

Yes.

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17th Dec 2018 14:27

I vote yes.

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By mumpin
17th Dec 2018 15:05

Depends if other income was over £16,500 or not (in17/18)

https://www.gov.uk/apply-tax-free-interest-on-savings

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to mumpin
17th Dec 2018 15:13

Other income was more than £16,500

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17th Dec 2018 23:38

Basically yes. It's a rate band that overlays the first £1k/£500 of savings income, unless that savings income is also in the first £5k of taxable income.

Don't deduct Saving Allowance from your savings income, at your first chunk of savings income at 0%. Thinking of it this way round reduces mistakes.

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