Steph83

If you had a 3 year Fixed Rate savings Account that you could not take money out until maturity but which attracted interest each year which was paid back in to the savings account would tax on the interest be due in each separate tax year it is paid into the account or would the tax only be due on the total amount of interest received over the 3 years in the tax year that the savings account matures.

What is the calculation used when working out tax due on employment income & savings interest over the Personal savings allowance as there appears to be conflicting info on the HMRC website calculation guides as to how the calculation is done If for example & this is just an example , the total income was over £52000 which included interest over £1000 would you then deduct the personal allowance of £12,570 from this which would leave a total of £39430 which based on this would mean it was in the 40% tax band so you would therefore only have a personal savings allowance of £500. Do you then deduct the £500 PSA from this leaving a total taxable income of £38930 which would mean that £37700 of this would be taxed at 20% & the remaining difference of £1230 would be taxed a 40%.