Budget 2014 Savings Start Rate Tax Zero

Budget 2014 Savings Start Rate Tax Zero

The starting rate for savings income tax will be set to 0% and the band to which it applies will be extended from £2,880 in 2014-15 to £5,000 as of 6 April 2015.

What this means for 2014

From 6th April 2014 your personal allowance is £10,000.  This means you can earn (or have pension income) up to £10,000 per year with no tax to pay.

If you have additional savings interest only (and no further income, pensions or investment income) - up to £2,880 - you only pay 10% starting rate income tax on this.

What this means for 2015

From 6th April 2015 your personal allowance is £10,500.  This means you can earn (or have pension income) up to £10,500 per year with no tax to pay.

If you have additional savings interest only (and no further income, pensions or investment income) - up to £5,000 - you pay 0% starting rate income tax on this interest.

This means that for many, they could have a total income of £15,500 per year and pay zero tax.

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