The result is that most people will no longer pay tax on savings interest and banks and building societies will stop deducting tax from your account interest.
What counts as savings income?
- interest from bank and building societies accounts
- interest from credit union or National Savings and Investment accounts
- income from government or company bonds
- interest distributions from authorised unit trusts
- most types of purchased life annuity payments.
Interest from ISAs doesn't count towards your Personal Savings Allowance as it is already tax free.
You don't need to do anything to claim the allowance. If the amount of savings income you receive is higher than the allowance, banks and building societies will provide details to HMRC and they will amend your tax code to collect any tax due. If you complete a Self Assessment tax return you should carry on doing this as normal.
For further information go to https://www.gov.uk/government/publications/personal-savings-allowance-factsheet/personal-savings-allowance
If you have any questions get in touch and I can help demystify it for you