Millions of people will escape having to pay tax on savings interest from today, thanks to the Personal Savings Allowance (PSA).

Basic rate taxpayers will have a PSA of £1,000, and higher rate taxpayers £500. Savings interest within your PSA won’t be taxed.

Additional rate taxpayers will not get a PSA.

A client recently queried “If I am already saving into a tax-free account e.g. an ISA is that interest covered by this allowance?”. The good news is that interest that is already tax-free is not included, and will not count towards your PSA.

If you have any queries, or would like to discuss this further, please contact David Nash, Partner or Sarah Gray, Senior Tax Manager on 01788 539000.