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UK’s Osborne launches online calculator to get benefit from savings tax reforms

UK’s Osborne launches online calculator to get benefit from savings tax reforms

LONDON: UK Chancellor George Osborne has launched a new online calculator to help people determine if they can benefit from upcoming savings tax reforms.

At Budget 2014, Osborne announced that, from April 6, 2015, the ten percent starting rate of tax on savings income will be replaced with a new zero percent rate. The Government will also increase the value of savings that the zero rate applies to, from GBP2,880 (USD4,417) to GBP5,000.

The Government estimates that more than one million savers with an annual income of less than GBP15,600 will benefit from tax-free savings.

The online calculator will help savers to determine whether their income is low enough to be eligible. They will need to include any taxable wages, pensions, benefits, and savings they receive, as well as any tax-free personal allowance they transfer or receive from a spouse or civil partner under the new Marriage Allowance. If eligible for tax-free savings, savers will need to register their account with their bank or building society. Savers should also complete form R40 or include the figure on their tax return.

Osborne said: “A key part of our long-term economic plan is to support savers and boost hardworking peoples’ financial security at all stages of life. That’s why one month from now, the lowest earners can get their savings interest tax-free. This will provide a massive boost for 1.5m savers across the country, putting money in the pockets of those who need it most.”