The Low Incomes Tax Reform Group Urges Taxpayers to Reclaim Tax on Interest


The Low Incomes Tax Reform Group (LITRG) is urging people to claim back tax deducted from savings income in recent years now that they have received their P60s.

Up until 6 April 2016, financial institutions had to deduct 20% basic rate tax from interest paid to individuals’ bank accounts. The only exception was if you were a non-taxpayer and had registered to have interest paid gross.

Under the new savings regime introduced from 6 April 2016, financial institutions are no longer required to deduct basic rate tax from most interest payments. However, basic rate taxpayers can now have tax-free savings income of £1,000, while if their total taxable income is £17,000 or less, they will not pay any tax on their savings income.

Jane Parry, Managing Partner & Head of Tax, commented: “Anyone who has had a low income and been able to reclaim tax on their interest income should make sure that they do so for the 2015/16 tax year and any earlier years not yet claimed. The rules have now changed, but it’s important not to forget that you can still claim for the period up to 6 April 2016.”

For more information, please contact our tax team at or call 01254 679131.