The tax body has issued a warning to all savers, saying anyone who earns more than £10,000 in interest from dividends or savings will need to complete a self-assessment tax return
HMRC has shed light on its tax rules concerning a threshold that affects all savers. The tax authority responded to a customer's question about whether they would need to fill out a self-assessment tax return if their yearly interest earnings surpassed £2,000.
ISAs offer tax-free interest or investment growth. Savers can put up to £20,000 a year into ISAs without being taxed on the amount. Basic rate taxpayers can earn up to £1,000 a year in interest tax-free, which falls to £500 for higher rate taxpayers and to £0 for those on the additional rate. NSandI customers with Premium Bonds don't pay tax on any prizes they win in the monthly draw, and NSandI also provides a Direct ISA and a Junior ISA, reports the Manchester Evening News.
Prizes range from £25 up to a whopping £1million, including substantial amounts of £100,000 and £50,000. David Kindness, an accountant who contributes to Best Money, advised: "For meaningful returns, it's generally recommended to invest larger sums-around £20,000 or more."
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