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Posted Mon, 14 Aug 2023 17:18:24 GMT by abc123
Dear HMRC enquiry team, According to HMRC website, the following allowances are granted per tax year. The personal allowance : £12570 Starting rate for savings : £5000 Personal saving allowance : £1000 (basic rate) Please reply below questions. Thanks. Q1. Does it mean that the yearly maximum allowances for a person is £17570? Q2. Mr. A is retired and he does not have any other income. He only receives saving interest which isn't exceed £17570. Please advise if he needs to pay saving interest tax? Q3. Mr. B is also retired. He doesn't have any other income in the UK and he only receives saving interest £13570. Would Mr. B has saving interest tax allowance £13570 = £12570 +£1000? Does he need to pay saving interest tax,?? Best regards, abc123
Posted Thu, 17 Aug 2023 13:30:30 GMT by HMRC Admin 20
Hi abc123,

You are correct that the Personal Allowance is used first, then the starting rate if eligible and then the personal savings allowance.
If all the income falls within this there will be no tax due.

Thank you.
Posted Fri, 18 Aug 2023 10:45:02 GMT by HMRC Admin 25
Hi abc123,
No it is £17570 as the £1000 personal savings allowance is included within the £5000 starter rate. 
Thank you. 
Posted Fri, 18 Aug 2023 16:35:32 GMT by sportyfae
@ HMRC Admin 25 The savings nil rate (commonly referred to as the Personal Savings Allowance) is separate to the savings starter rate band. So someone who hasn't applied for Marriage Allowance can in theory have taxable income of £18,570 before any tax is payable. The Personal Allowance (£11,310 or £12,570) must be used first. Then any available savings starter rate band can be used (0% tax rate). And finally the savings nil rate band (also a 0% tax rate) can be used.
Posted Wed, 06 Sep 2023 12:00:27 GMT by abc123
I am a bit confused about the reply from HMRC. It stated that £1000 personal savings allowance is included within the £5000 starter rate. Why does personal savings allowance is given as it does not increase the tax allowance at all? As what it said, personal savings allowances is no point to follow after the staring rate for saving. Kindly reconfirm. Thanks.
Posted Tue, 12 Sep 2023 08:12:55 GMT by HMRC Admin 32

The personal savings allowance is not included in the starter rate.

Tax on savings interest

Thank you.

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