Your Personal Savings Allowance is the total amount of interest you can earn each tax year across all your bank accounts without paying tax. A PSA allows people who pay a basic or higher rate of income tax to have an amount of savings interest that’s kept tax-free.
If you’re a UK taxpayer, you’ll have a tax-free Personal Savings Allowance (PSA) of £1,000 that you can earn in interest on your savings (it’s £500 for higher rate taxpayers and £0 for additional rate taxpayers).
Any interest you earn above your PSA will be subject to tax. It’s your responsibility to make sure any tax due on interest payments received is paid to HM Revenue & Customs (HMRC).
Please note:
- Your PSA applies to the total interest you earn from all banks/building societies, not just interest from Vanquis Savings – except ISAs, which are free from UK tax for eligible customers.
- Tax liability on interest applies in the tax year it’s paid, which may be different to the tax year(s) the interest accrued. If you’ve paid tax on your savings in a previous tax year but you think you shouldn’t have, you’ll need to complete an R40 claim form.
