If you have taxable income of less than £17,570 in 2023-24 you will have no tax to pay on interest received. This figure is calculated by adding the £5,000 starting rate limit for savings (where 0% of the interest is taxable) to the current £12,570 personal allowance. However, it is important to note that if your total non-savings income exceeds £17,570 then the starting rate limit for savings is unavailable.

There is a tapered relief available if your non-savings income is between £12,570 and £17,570 whereby every £1 of non-savings income above a taxpayer's personal allowance reduces their starting rate for savings by £1.

There is also a Personal Savings Allowance (PSA) that can be beneficial to many savers. This allowance ensures that for basic-rate taxpayers the first £1,000 interest on savings income is tax-free. For higher-rate taxpayers the tax-free personal savings allowance is £500. Taxpayers paying the additional rate of tax on taxable income over £125,140 do not benefit from the PSA.

Interest from savings products such as ISA's and premium bond wins do not count towards the limit. So, taxpayers with tax-free accounts and higher savings can still continue to benefit from the relevant PSA limits.

Banks and building societies no longer deduct tax from bank account interest as a matter of course. Taxpayers who need to pay tax on savings income are required to declare this as part of their annual Self-Assessment tax return.

Taxpayers that have overpaid tax on savings interest can submit a claim to have the tax repaid. Claims can be backdated for up to four years from the end of the current tax year. This means that claims can still be made for overpaid interest dating back as far as the 2019-20 tax year. The deadline for making claims for the 2019-20 tax year is 5 April 2024.

The Construction Industry Scheme (CIS) is a set of special tax and national insurance rules for those working in the construction industry. Businesses in the construction industry are known as 'contractors' and 'subcontractors' and should be aware of the tax implications of the scheme.

Under the scheme, contractors are required to deduct money from a subcontractor’s payments and pass it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and National Insurance liabilities.

Contractors are defined as those who pay subcontractors for construction work or who spent more than £3m on construction a year in the 12 months since they made their first payment. Subcontractors do not have to register for the CIS, but contractors must deduct 30% from their payments to unregistered subcontractors. The alternative is to register as a CIS subcontractor where a 20% deduction is taken or to apply for gross payment status.

Monthly returns must be submitted online. The monthly return relates to each tax month (i.e., running from the 6th of one month to the 5th of the next). The deadline for submission is 14 days after the end of the tax month. Contractors who have not paid subcontractors in a particular month are required to submit a 'CIS nil return' or notify HMRC that no return is due.

Additionally, new VAT rules for building contractors and sub-contractors came into effect on 1 March 2021. This means that for certain specified supplies, sub-contractors no longer add VAT to their supplies to most building customers, instead, the contractors are obliged to pay the deemed output VAT on behalf of their registered sub-contractor suppliers. This is known as the Domestic Reverse Charge. The contractors can then claim back the output tax paid as input VAT, subject to the usual rules.

The January Self Assessment deadline seems like a long way off, but you don’t have to wait until the last minute to file your return.

Self Assessment customers can take advantage of four key benefits when filing early, HM Revenue and Customs (HMRC) has revealed.

Filing ahead of time will give customers more control over their financial affairs and beat the January rush.

The four benefits to filing early are:

• Planning: find out what you owe for the 2022 to 2023 tax year as soon as you have filed, which allows for more accurate financial planning.
• Budgeting: spread the cost of your tax bill with weekly or monthly payments using HMRC’s Budget Payment Plan.
• Refund: Check if you’re due a refund in the HMRC app once you’ve filed.
• Help: you can access a range of online guidance and information to help you file your return and get help if you are unable to pay your bill in full by the 31 January deadline. You may be able to set up a Time to Pay plan.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Customers who file their tax return early get to see exactly what they owe and have more time to budget, reducing the stress around Self Assessment.

“Given that January is the busiest month for HMRC’s phone lines, I urge customers to check out the tips on filing your tax return early on GOV.UK and to consider doing so themselves.”

There is lots of help and support available online:

• customers can access the new online tool to check whether they need to do a Self Assessment tax return.
• HMRC’s top tips for filing tax returns early can be found on GOV.UK.
• ask HMRC’s digital assistant to find information about Self Assessment. If they cannot help, chat live with an HMRC webchat adviser.
• access webinars and videos about Self Assessment

Customers need to be aware of the risk of falling victim to phishing scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is also available on GOV.UK.

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