Tax on savings interest income and starting rate for tax £5k

My wife is confused about why her tax code has been reduced to 1050L P60 income for 22/23 was £10444 tax code 1238L and savings interest £470 P60 income for 23/24 was £10882 tax code 1226L and savings interest £1830 She’s logged into her HMRC to check her NI and realised that in November her tax code was reduced to 1085L and has been reduced again for 24/25 to £1050. She’s had no letters from HMRC or emails advising there’s a change to her tax code and can’t get through on the phone to enquire. Every time she contacts HMRC she’s cut off after 30 minutes. annual salary is £10654, interest is £1711 and total income is £23 over the personal tax allowance and now she’ll be paying tax on and doesn’t appear to be allowed any of the £5000 starting rate for tax allowance? She’s under the impression £10654 salary, £1711 interest and as her total income is under £17570 she qualifies for starting rate for savings? Is she incorrect in her understanding how the starting rate for savings works? Any help appreciated! Thank you

Hi,

Your wife is correct, in terms of her bank interest, in addition to the starters rate for savings of £5000, she would also be entitled to the £1000 Personal Savings Allowance, as well as any unused Personal Allowances.

To confirm why her tax code has been reduced for both years, we would need to review her record and so she will need to contact our Income Tax team.

Income Tax: general enquiries 

Thank you.