This may be a pre-election stunt or a long overdue promise but with all of the uproar over “The End of the Tax Return” (which isn’t really the end of the tax return) this appears to have been missed by many. From April 6th 2016, every basic-rate taxpayer will be able to earn £1,000 interest a year without having to pay tax. Higher-rate taxpayers will be able to earn £500 interest. So what? We all get such little interest nowadays this isn’t going to make much difference, or is it? Well, the biggest difference is that from April 6th 2016, banks and building societies will stop automatically deducting interest from your savings. It will all be paid tax-free. Still so what? Well, this little step effectively moves millions of people into the claws of Self-Assessment tax returns. I guess, technically speaking, if you know that no tax is due on your interest then there isn’t a need to prove this via a Self-Assessment return. But what of the PAYE population who actually do have enough interest to trigger a small tax bill? I’ve no idea how many people will be in this position (perhaps not many) but until the Digital Tax Accounts are fully functional and automatically linked to our PAYE and interest bearing accounts there are going to be even more people completing Self-Assessment returns than ever before!
