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Dear Sir/madam,
I’ve not thoroughly understood concept of basic tax rate of savings income.
Why do we have to deduct non-savings income from the starting rate band of 2440?
e.g 2440-1025(non saving income)=1415*10%
5000(savings income)-1415= 3585*20%thanks.
Savings income is taxed at 10% it there is any remaining starting rate band after taxable non savings
In the example above the taxable non savings has used up £1025 of the £2440 starting rate band so there is £1415 available for the 10% rate on savings. The savings in excess of £1415 is at 20%
Hope this helps
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