Do I have to pay Tax on interest? - HotUKDeals
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Do I have to pay Tax on interest?

speedy1477 Avatar
banned6y, 4w agoPosted 6 years, 4 weeks ago
Please can someone help me.

I am 17, I have been in college for over 1 year. So I am a student.

Please can someone confirm if I should pay 20% tax on my interest?

The reason I am asking is because I was charged £30.22 and I was wondering if I can claim that back.

If I dont, will it be ok to go into my bank and take my enrollment form?
speedy1477 Avatar
banned6y, 4w agoPosted 6 years, 4 weeks ago
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(21) Jump to unreadPost a comment
Comments/page:
#1
What are you paying tax on? Savings?
#2
interest is a form of income so therefore is taxable
banned#3
thesaint
What are you paying tax on? Savings?

Yes. I paid Tax on the interest I earned on a savings account.
#4
Yes, your interest is taxed at 20%.

The last interest I received was in the pence, with a whole 20% taken off (about 2p LMAO).

The answer is yes.
banned#5
roryk83
interest is a form of income so therefore is taxable

The reason I questioned this is because I read online that children, students and pensioners on low income dont pay tax.

Edited By: speedy1477 on Nov 05, 2010 12:18: .
#6
Surely it depends on your total income and your tax limit.
banned#7
greg_68
Surely it depends on your total income and your tax limit.

I dont have a income other than £30 EMA. Which means I dont pay tax. I just read this : If you're a non-taxpayerIf your level of income means that you don't need to pay tax, you can complete a form 'R85 - Getting your interest without tax taken off'. If you've already had tax taken off your interest, you will be able to claim it back.

Thanks for your help, everyone :)

Edited By: speedy1477 on Nov 05, 2010 12:21: .
1 Like #8
someone who actually works will give a better answer shortly (after 5 probleeee)
banned#9
splatsplatsplat
someone who actually works will give a better answer shortly (after 5 probleeee)

Lol, thanks. I would ask my dad but I cant ask him til tomorrow :(

I was planning on going into town today which I will have to pay for a bus and it takes a few hours of my time (In total). So I was checking before I left.
1 Like #10
Some of the above answers are wrong.

Savings income is taxable (i.e. eligible for tax) ; but you don't necessarily have to pay tax on it.

Everyone has a certain amount of money they can earn each year tax free. Assuming you are single, your tax free amount is £6475 per year. Anything you earn - including interest - below that amount is not taxed at all.

Therefore if you have an income - say from a part time job - of £4,000 per year, and your savings interest is less than £2475, you pay nothing. If your job income was £6000 per year and savings income was £500 you would only pay 20% tax on the amount over £6475 - in other words 20% of £25.

However, the bank will always deduct interest because they don't know your income status. You need to fill in form IR85 to give to your bank and they will pay you the full amount once the tax people have checked you out.

Most people do not realise that banks / building socs etc will deduct tax from accounts held by children (e.g. 2 year olds) unless they lodge an IR85.


Edited By: virus on Nov 05, 2010 12:29: spelling
1 Like #11
How are most of the answers above wrong when nobody knew what his total income was, he should pay tax if above the taxable limit but he has now revealed that he doesn't earn anything in which case all of the replies would have said no you do not have to pay tax.
banned#12
virus
Some of the above answers are wrong.Savings income is taxable (i.e. eligible for tax) ; but you don't necessarily have to pay tax on it.Everyone has a certain amount of money they can earn each year tax free. Assuming you are single, your tax free amount is £6475 per year. Anything you earn - including interest - below that amount is not taxed at all.Therefore if you have an income - say from a part time job - of £4,000 per year, and your savings interest is less than £2475, you pay nothing. If your job income was £6000 per year and savings income was £500 you would only pay 20% tax on the amount over £6475 - in other words 20% of £25.However, the bank will always deduct interest because they don't know your income status. You need to fill in form IR85 to give to your bank and they will pay you the full amount once the tax people have checked you out.Most people do not realise that banks / building socs etc will deduct tax from accounts held by children (e.g. 2 year olds) unless they lodge an IR85.

Thank you for your answer after researching this topic everything you suggested is correct. I really apprciate your time. Thank you for a constuctive answer.
#13
greg_68
How are most of the answers above wrong when nobody knew what his total income was


cause no-one asked! and if you dont know that - you wouldnt have been able to tell him the correct answer?
#14
greg_68
How are most of the answers above wrong when nobody knew what his total income was, he should pay tax if above the taxable limit but he has now revealed that he doesn't earn anything in which case all of the replies would have said no you do not have to pay tax.

+1

No info = general answer.
#15
Yes, you should get your tax back.
The basic tax threshold is £6,475, so total income below that is not taxable.
Make sure that you always tick the box, or whatever, on accounts so that they are tax free.

Edited By: chesso on Nov 05, 2010 12:37: ..
#16
actually, we should now ask:

Do you live in monaco (and fly to uni everyday)?
Do you have a Thai Bride who holds all your assest in her (or he, before he was a her?)'s name
Are you pregnant? (that one always appears on forms doesnt it!?)
How much did you bribe your local tax inspector?
Is Daddy: Lord Ashcroft?
#17
Damn I missed the Thai bride question up didn't I? He/She, He-she, it, whatever they were/are?
#18
If you are a full time student you dont pay the 20% tax, if you have paid it then you can reclaim it from the taxman.
#19
If you are not a tax payer you need to register the account for gross interest - do this with the bank. Be certain you are not liable for tax though...
banned#20
Thanks again.

I beleive I am able to claim my money back because my income is less than £2,440. I will be visiting my local tax office in the next few days. I have 7 years to claim this back, so I have plenty of time :)

Edited By: speedy1477 on Nov 05, 2010 17:53: .
#21
tawalkden - Nov 05, 2010 13:12
If you are a full time student you dont pay the 20% tax,


....unless you earn more than £6475 a year.

Being a student does not give you tax exemption per se.

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