The following examples relate to interest on non-ISA savings and current accounts:
Ellie earns £23,000 a year and makes £350 in interest. After April 2016, she won’t have to pay tax on the £350 as it is beneath her £1,000 PSA.
Raj earns £27,000 a year and makes £1,500 in interest. After April, he won’t have to pay tax on the first £1,000 of his interest, but he will have to pay 20% tax on the remaining £500.
Jocelyn earns £70,000 a year and makes £1,200 interest. After April, she won’t have to pay tax on the first £500 of her interest, but she will pay 40% tax on the remaining £700 of her interest.
Chrissie earns £160,000 and makes £500 interest. After April, she will continue to pay 45% tax on her interest.