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I do have another thing to add though which is that the advice for someone on PAYE is they don't need to fill in a self assessment form if they don't earn over £1000 of savings interest income however if they did it would shift more of their income into a higher band and incur more tax.

I have since discovered that the savings interest allowance is not so much an allowance but rather a 0% tax band for the first part savings income. This means it is still included in the total income and therefore the final tax band that further income falls into. In my case it meant further income went into the higher rate and increased the tax due. This is confusing because as mentioned it is not really an allowance as it can still lead to additional tax.

When I entered an interest amount it added it to my income and therefore attracted tax at that rate, is this a problem with the calculation? It is within the allowance for the tax band so I would not expect it to be taxed.

After submitting my self assessment and reviewing the calculation I can see that the savings interest income has been added to my total income and incurring additional tax. The interest amount is below £500 and the total income is in the higher rate. Why has the interest income been included in the total income when it is within the tax free allowance or alternatively why is there no line to remove it as part of the allowance tax relief? I can see a line under the Starting Rate heading that shows there is no tax directly on the savings interest however it is added to the total income therefore it is being taxed so unless I'm mistaken and ordinarily it gets taxed twice this seems like a mistake in the calculation.