Savings tax to be abolished in today's Budget 2015

Tax on income from savings is set to be thrown out for millions of hard-working people in today’s Budget by Chancellor, George Osborne.

In last year’s Budget, Mr Osborne revealed that the 10 per cent tax on savings for people on low incomes would be abolished from April 2015 – a move which will aid more than 1.5 million savers, most notably many pensioners.

Today, Osborne is expected to go one further by scrapping the 20 per cent savings tax for all but the highest earners.

For savers who pay the basic 20p rate of tax, income from savings is currently taxed at 20 per cent and is deducted at source by building societies and banks. However, this tax is expected to be scrapped today, leaving only those paying the higher 40p tax rate to be taxed at 40 per cent on their savings income.

Other measures expected to be announced by the Chancellor include a larger than anticipated increase to the tax-free personal allowance.

The figure was set to rise to £10,600 next month but it is thought Osborne will announce an additional increase up to around £11,000.

Mr Osborne is expected to say to the Commons: “The critical choice facing the country now is this: do we return to the chaos of the past?

“Or do we say to the British people, let’s work through the plan that is delivering for you?

“Today, we make that critical choice: we choose the future. We have a plan that is working – and this is a Budget that works for you.”

If you’d like to keep track of the Budget 2015 highlights please visit our Twitter feed @TaxAssistUK and stay tuned to our Budget 2015 summary page later today for a comprehensive round-up of the changes that affect your small business.



Image: The CBI

Date published 18 Mar 2015 | Last updated 18 Mar 2015