[1906254@uad.ac.uk]

Here is an example which might explain better what I am asking (ignoring the first £5k rule):

For the tax year 2020-21, Joe has a salary of £46,500, savings income of £2,000 and dividend income of £6,000. During the year, he paid interest of £300 which was for a qualifying purpose. Joe’s employer deducted £6,800 in PAYE from his earnings. The income tax payable by Joe is:

Non Savings Income : £46,500 – £300 – £12,500 (PA) = £33,700
Savings income: £2,000
Dividend income : £6,000
Total income : £46,500 + £2,000 + £6,000 – £300 – £12,500 = £41,700

What would be the personal savings allowance here – £500 or £1,000?

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