{"id":679,"date":"2025-04-10T11:04:21","date_gmt":"2025-04-10T11:04:21","guid":{"rendered":"https:\/\/pharosstory.com\/?p=679"},"modified":"2025-05-02T02:35:09","modified_gmt":"2025-05-02T02:35:09","slug":"887000-brits-with-3500-or-more-in-savings-to-receive-imminent-hmrc-tax-bill","status":"publish","type":"post","link":"https:\/\/pharosstory.com\/index.php\/2025\/04\/10\/887000-brits-with-3500-or-more-in-savings-to-receive-imminent-hmrc-tax-bill\/","title":{"rendered":"887,000 Brits with \u00a33,500 or more in savings to receive imminent HMRC tax bill"},"content":{"rendered":"
\n
\n\t\t\"Tax\t<\/div>
The end of the tax year is almost upon us (Picture: Getty Images)<\/figcaption><\/figure>\n

With a new financial year having started this week, a ‘significant’ number of UK savers<\/a> could find themselves with an unexpected HMRC bill<\/a> in a matter of days.<\/p>\n

Although you don’t have to pay tax on money you’ve saved, you are taxed<\/a> on interest earned over a certain amount \u2014 and following years of rising interest rates, these thresholds are easier than ever to hit.<\/p>\n

What you can expect all depends on the type of account<\/a> you have and your income tax band<\/a>.<\/p>\n

But anyone with a pot of \u00a33,500 or more could soon receive a letter, so it’s worth checking now to avoid a nasty surprise.<\/p>\n

How much tax do you pay on bank interest? <\/h2>\n

Basic rate taxpayers – earning \u00a312,571 to \u00a350,270 annually – are allowed to earn \u00a31,000 a year in tax-free interest, with anything above this amount charged at 20%.<\/p>\n

Meanwhile, the personal savings allowance (PSA) for those on the higher rate – with an income of \u00a350,271 to \u00a3125,140 each year – is \u00a3500, beyond which a 40% tax is incurred.<\/p>\n

\n
\n\t\t\"Young\t<\/div>
You’re taxed on interest earned over a certain amount (Picture: Getty Images)<\/figcaption><\/figure>\n

Then there’s the different type of account: according to Money Saving Expert<\/a> (MSE), those on the basic rate would need around \u00a320,000 <\/strong>placed in a top easy-access savings account<\/strong> to exceed the allowance at current rates, with the figure for higher rate taxpayers sitting just over \u00a310,000.<\/p>\n

However, if you save through a fixed-rate account<\/strong>, which locks your cash away for a set time, the threshold will be far lower.<\/p>\n

Because <\/strong>you’re taxed on savings interest in the tax year you can access<\/em> it, if you opt for a fixed-rate savings account longer than a year where the interest is paid at maturity, all the interest is counted towards the final year’s PSA.<\/p>\n

So, higher rate taxpayers with as little as \u00a33,500 on a three-year fixed rate of 5% will go over their allowance, or roughly \u00a37,000 for anyone on the basic rate.<\/p>\n

\n

\n\t\t\t\tTypes of savings interest subject to tax\t\t\t<\/h2>\n
\n

Your allowance applies to interest from:<\/p>\n