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Where Taxpayers and Advisers Meet

Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am
Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Postby Deidre22 » Tue Apr 26, 2022 7:06 pm

Do HMRC give the £1000 tax free savings in your PAYE code automatically?

D&C
Posts:153
Joined:Mon Nov 25, 2019 11:35 pm

Re: Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Postby D&C » Tue Apr 26, 2022 7:25 pm

ISA's generate tax free savings interest.

Virtually all other interest is taxable however most people don't pay tax on it unless their total taxable income exceeds £18,570. This consists of the Personal Allowance, savings starter rate of tax (upto £5,000 taxed at 0%) and savings nil rate of tax (upto £1,000 taxed at 0%).

Assuming your earnings or pension income have used your Personal Allowance and the savings starter rate of tax then you may see the benefit of the savings nil rate of tax in your tax code.

For example someone with earnings of £20,000 and untaxed interest of £1,200 would usually have a tax code deduction of £200 relating to the interest.

The above is for someone who isn't Scottish resident for tax purposes.

If your taxable income is £17,570 or less than you cannot benefit from the savings nil rate (confusingly known as the Personal Savings Allowance)

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Postby Deidre22 » Tue Apr 26, 2022 8:08 pm

My new tax code for 22/23 is 103L. Annual occupational pension 5380 and State pension 9627.
Deduction for untaxed interest in code is 1725
Actual untaxed interest will be approx 1200.
I understand any ISA interest won’t be in the PAYE code.
Is tax code too low?

Thanks for your reply

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Postby Deidre22 » Tue Apr 26, 2022 8:11 pm

PS. There is also 183 deduction in code due to £36 underpayment for previous year.

bd6759
Posts:4254
Joined:Sat Feb 01, 2014 3:26 pm

Re: Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Postby bd6759 » Tue Apr 26, 2022 9:54 pm

Looks like your tax code is wrong.

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: Do HMRC give the £1000 tax free savings in your PAYE code automatically?

Postby Deidre22 » Tue Apr 26, 2022 11:39 pm

As there’s never anyone answering phone, will send letter and hope it gets sorted by xmas. Thank you.


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