Taxpayers can now earn £500-£1,000 in savings income tax-free.

From 6 April 2016, basic rate taxpayers can earn up to £1,000 in savings income tax-free. Higher rate taxpayers can earn up to £500. These are the Personal Savings Allowance.

Savings income includes account interest from:

  • bank and building society accounts
  • accounts with providers such as credit unions or National Savings and Investments
  • interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts
  • income from government or company bonds
  • most types of purchased life annuity payments.

You can see examples at ACCA’s UK technical advice and support pages

HMRC has published a guide to the Personal Savings Allowance

Article from ACCA In Practice