Archive Website of the UK government

Who can get tax-free savings interest?

Banks and building societies usually deduct 20 per cent tax from the interest they pay on most types of savings account. But if your total taxable income is less than your tax-free Personal Allowance (and any Blind Person's Allowance if you receive this) then you can:

• register to get savings interest paid tax-free
• claim back any tax you've paid

Taxable income includes money you earn from a job. But it excludes money you get from certain benefits and some other sources.

Your Personal Allowance is the amount of income you can get tax-free and depends on your age and circumstances.

• Check your current level of Personal Allowance

• Taxable and non-taxable income at a glance

If you only pay a small amount of Income Tax

If your taxable income is only slightly higher than your tax-free allowance(s) then some or all of your savings interest may be taxable at 10 per cent - the 'starting rate for savings'.

If this applies to you, you'll probably be able to claim some tax back if it's been deducted from your interest. The amount you can reclaim is the difference between the tax that was deducted and the amount that's actually due.

• Tax on bank and building society accounts

• Help with PDF files

How to get interest without any tax taken off if you're not a taxpayer

To register to get interest on your savings tax-free you need to fill in form R85 'Getting your interest without tax taken off' and send it to your bank or building society. Some banks and building societies also let you register by phone.

You'll have to fill in a separate form R85 for each bank or building society where you've got accounts. If you open a new account you'll need to check your income and allowances and fill in a new form.

If you're under 16, your parent or guardian will have to register for you.

Once you turn 16, you’ll have to complete a fresh R85 - and sign it yourself - if it’s appropriate for you to continue getting your interest paid without tax taken off.

Checking if you can get your interest tax-free

You can check if you can get your interest tax-free by filling in the table in the helpsheet that comes with form R85. Or you can use the simple online checker on the HM Revenue & Customs (HMRC) website.

• Online tax-free interest calculator Opens new window

• Go to form R85 and help sheet Opens new window

How to claim tax back

If you think you've paid too much tax on your interest you can claim it back. To do this you'll need to fill in a form R40 Tax Repayment Form. You'll have to do this for each year you think you paid too much tax.

In most cases you’ll get back the tax you’ve overpaid as long as you claim on time.

Time limits for claiming back tax

The time limits for claiming a refund are shown in the table below. If you don't make a claim within the time limit you'll miss out on any refund due.

• Get form R40 and help notes on completing the form Opens new window

• Income Tax Helpline

What to do if your circumstances change

Your income and tax allowances can change from year to year - and during the year. So you may find your income goes up and your tax allowances no longer cover it.

If this happens it's important you tell your bank or building society straight away so they can start taking tax off your interest. Otherwise you may have a tax bill at the end of the year.

Getting help

If you need any help getting tax-free interest you can call the HMRC Savings Helpline on 0845 980 0645. Lines are open from 8.30 am to 5.00 pm Monday to Thursday and from 8.30 am to 4.30 pm on Friday (not including bank holidays).

More useful links

• Reclaiming tax on purchased life annuity income

• Blind Person's Allowance - HMRC website Opens new window

• Read about Saving and investing with ISAs

• Find out about Children's savings schemes and accounts

Useful contacts

• Money, tax and benefits contacts

• National Insurance Contributions Office