Latest news with #SallyConway
Business Mayor
23-05-2025
- Business
- Business Mayor
HMRC to send out 6 million unexpected bills to ‘rule break' UK households
Millions of households across the UK could be set for a HMRC letter after they accidentally breached a 2016 rule. In January, more than six million accounts exceeded the Personal Savings Allowance (PSA) threshold, designed to let savers earn a limited amount of interest tax-free. As a result, millions of people could be set for an unexpected tax bill in the coming months. Sally Conway, savings expert at Shawbrook, said: 'Without careful consideration, savers could face a shock tax bill on their nest eggs. With savers still taking advantage of competitive interest rates, many savers could be sleepwalking into a tax bill on their interest.' She added: 'This is particularly relevant for higher-rate taxpayers, who only get £500 tax-free, and additional-rate taxpayers, who get none. 'For example, a higher-rate taxpayer with £12,000 in a non-ISA account earning 4.30% could exceed their tax-free allowance. 'There are currently over five million more savings accounts at risk of tax than there were just over three years ago. This outlines just how much the frozen threshold has impacted savers who aren't making use of ISAs. 'It can be a great way to boost savings in a tax-efficient manner. Additionally, exploring options beyond major banks might lead to better interest rates, often specialist savings banks can be savers' best-kept secret.' The personal savings allowance allows taxpayers to earn £1,000 of interest tax free each year, but this is slashed to £500 for higher rate taxpayers and is zero for those paying 45p tax. Frozen income tax thresholds are causing more and more people to pay the higher rate of tax, meaning that they are unwittingly reducing their personal savings allowance by 50%. As a result, those earning more than £50,270 will lose 40 per cent to tax on any interest of more than £500 per year. The tax-free allowance relates to interest earned in bank and building societies, savings and credit union accounts, peer-to-peer lending, trust funds and some life insurance contracts. For people unsure about whether they are likely to owe tax to HMRC or wondering how much they will be obligated to pay, the government's website allows you to check using their tax calculating tool. READ SOURCE
Wales Online
23-05-2025
- Business
- Wales Online
HMRC to contact six million UK households over 2016 savings tax rule
Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info Millions of UK households are set to receive a letter from HMRC after inadvertently breaking a 2016 rule, with six million savings accounts likely to exceed the tax threshold set by the previous Labour government, resulting in an unexpected tax bill. Over six million accounts surpassed the Personal Savings Allowance (PSA) in January, a limit introduced in 2016 allowing savers to earn some interest without paying tax. Sally Conway, a savings specialist at Shawbrook, warned: "Without careful consideration, savers could face a shock tax bill on their nest eggs." She added: "With savers still taking advantage of competitive interest rates, many could be sleepwalking into a tax bill on their interest. "This is particularly relevant for higher-rate taxpayers, who only get £500 tax-free, and additional-rate taxpayers, who get none. For example, a higher-rate taxpayer with £12,000 in a non-ISA account earning 4.30% could exceed their tax-free allowance." Ms Conway said: "There are currently over five million more savings accounts at risk of tax than there were just over three years ago. This outlines just how much the frozen threshold has impacted savers who aren't making use of ISAs. "It can be a great way to boost savings in a tax-efficient manner. Additionally, exploring options beyond major banks might lead to better interest rates, often specialist savings banks can be savers' best-kept secret." The personal savings allowance means basic rate taxpayers can earn £1,000 of interest from their savings each year tax free, but this is slashed to £500 for higher rate taxpayers and is zero for those paying 45p tax, reports BirminghamLive. Frozen income tax thresholds are dragging increasing numbers of people into paying higher rate tax on the savings interest they earn. This means that those earning more than £50,270 will lose 40 per cent to tax on any interest of more than £500 per year. Sign up for the North Wales Live newsletter sent twice daily to your inbox Find out what's happening near you
North Wales Live
23-05-2025
- Business
- North Wales Live
HMRC to contact six million UK households over 2016 savings tax rule
Millions of UK households are set to receive a letter from HMRC after inadvertently breaking a 2016 rule, with six million savings accounts likely to exceed the tax threshold set by the previous Labour government, resulting in an unexpected tax bill. Over six million accounts surpassed the Personal Savings Allowance (PSA) in January, a limit introduced in 2016 allowing savers to earn some interest without paying tax. Sally Conway, a savings specialist at Shawbrook, warned: "Without careful consideration, savers could face a shock tax bill on their nest eggs." She added: "With savers still taking advantage of competitive interest rates, many could be sleepwalking into a tax bill on their interest. "This is particularly relevant for higher-rate taxpayers, who only get £500 tax-free, and additional-rate taxpayers, who get none. For example, a higher-rate taxpayer with £12,000 in a non-ISA account earning 4.30% could exceed their tax-free allowance." Ms Conway said: "There are currently over five million more savings accounts at risk of tax than there were just over three years ago. This outlines just how much the frozen threshold has impacted savers who aren't making use of ISAs. "It can be a great way to boost savings in a tax-efficient manner. Additionally, exploring options beyond major banks might lead to better interest rates, often specialist savings banks can be savers' best-kept secret." The personal savings allowance means basic rate taxpayers can earn £1,000 of interest from their savings each year tax free, but this is slashed to £500 for higher rate taxpayers and is zero for those paying 45p tax, reports BirminghamLive. Frozen income tax thresholds are dragging increasing numbers of people into paying higher rate tax on the savings interest they earn. This means that those earning more than £50,270 will lose 40 per cent to tax on any interest of more than £500 per year.
