Get Those Forms R85 Ready

From 6th April 2015, there is a new savings rate of income tax of 0% that applies to the first £5,000 of interest above the personal allowance.

If you have total income of no more than £15,600, then you should pay no income tax on your bank or building society interest.

Of course, banks take a lot of persuading not to tax you.  You will need to provide them with form R85.  Otherwise, they will stop you basic rate tax and you will then have to claim it back from the Revenue.

HMRC’s own stats suggest there will be an extra 1m eligible for exemption from tax on bank interest.  That’s 1m of you who should be getting those forms to your bank by 5th April.