Personal Savings Allowance (PSA) – why it’s still important to file your tax self-assessment
As the 31 January self-assessment deadline looms, it’s important for taxpayers to understand the implications of changes to the Personal Savings Allowance (PSA).
That’s the message from Chas Roy-Chowdhury, head of tax at ACCA (the Association of Chartered Certified Accountants), who says: “As of the 16/17 tax year, basic rate taxpayers can earn up to £1,000 in savings income tax-free, and higher rate taxpayers up to £500.
“While this is, of course, good news for savers, it may also lead to some confusion around filing self-assessments. Some taxpayers may be under the impression that they no longer have to file a self-assessment, or may have received communication from HMRC advising them that they now fall under the PAYE system only.
“However, if a taxpayer has changed jobs or circumstances, they may still be eligible for a tax refund (or owe tax). If you have any doubt about your tax status, even if you have received communication from HMRC, I strongly recommend that you self-assess as usual despite PSA changes.
“Online tax returns are due by midnight on the 31 January 2017, and it is worth remembering to register at least two weeks beforehand to allow enough time to complete the registration process.”