Tax Deducation at Source

[rps1969]

Ok

 

I seem daft asking this question, but there maybe some Bankers out there.

 

"Tax Deducation at Source"

 

My question is how do banks take this at source. As i see it now, banks will automatically deduct tax from the interest pass it to their local tax authority, indicating how much of the total amount relates to savings. I see all the good offers and such like for investment purposes at around 5-6% but but is this a true reflection

 

We all know how tax is deducted in our payslips but not with banks based upon UK Personal Allowances.

[nufsaid]

This is beyond me had a looksie on the internet and frankly it's given me a headache lol.

Hopefully some clever bod here may know the answer.

It does seem a bit wrong though everything in this country is nothing but tax to me grrrr.

Sorry I couldn't be any help.

NS.

[rps1969]

Thanks for looking anyway.

 

Yep, you are taxed on everything more than once in this country !

[Aequitas]

Yep, you are taxed on everything more than once in this country !

 

 

As I understand it, tax deducted at source is always deducted at the standard rate.

 

If you do not pay tax at the higher rate and the amount of interest does not take you into the higher rate, you are all square.

 

If you are or go into the higher rate, you have some additional tax to pay, but the tax deducted at source is taken into account.

 

If you pay tax at the lower rate only and the interest does not take you into the basic rate, you are due a refund.

 

If your sole source of income is taxed at source, tax is only payable at the lower rate on the amount on which the lower rate is payable, so you would be due a refund, although presumably if the income is sufficiently high that you pay tax at the higher rate it will be set off against it.

[nufsaid]

And the above comment is why this question made me go cross eyed lol

 

Tax is taxing never mind what the chap on the ad says.

 

it's all a bit beyond me.

Great answer mind Aequitas.

[Aequitas]

Just a few "for examples":

 

If your only source of income is bank interest and it is £2000, you can get half the tax deducted back.

 

If you earn £20,000 a year and have £2000 bank interest and no other income, you cannot claim any tax back, but neither do you owe any.

 

If you earn £100,000 a year and have £2000 bank interest you have to pay tax on it at the higher rate, but the tax deducted is taken into account.

[rps1969]

Ok so if I were to put £489K into the bank, (for which to question is really for and is the amount)and the interest is my only source of income, anything above my basic rate of personal tax would be taxable ?

 

Am I correct ?

[Aequitas]

Ok so if I were to put £489K into the bank, (for which to question is really for and is the amount)and the interest is my only source of income, anything above my basic rate of personal tax would be taxable ?

 

Am I correct ?

 

Yes.

[BeauBrummie]

Hi Aequitas,

 

Yes you are correct less your personal allowances of the day but on your Self assesmnet form it is shown as income (Gross) and then tax paid leaving net assessable income balance.

 

That is a very basic overview of what you are saying

 

Beau

[rps1969]

Thanks for your advice. Im now off to Austria to live.

[nufsaid]

Thanks for your advice. Im now off to Austria to live.

 

I dont blame ya and can I come please.

[Aequitas]

Thanks for your advice. Im now off to Austria to live.

 

Choose where you go. In some parts they have rules requiring you to display geraniums on your balcony. Expensive, as you won't have the space to overwinter them. The Austrians complain about it more than they complain about tax.

[rps1969]

LOL