Taxation
Personal Accounts
The information on this page is for information purposes only and does not constitute as any form of personal tax advice. If you have any questions regarding your personal tax situation please contact your local tax office.
Most interest paid by us is payable after deduction of income tax at the special lower rate, currently 20%. Where the tax deducted exceeds your tax liability (if any), a claim may be made to the HM Revenue & Customs for repayment of tax. If you are not liable to income tax, you may be able to register with us to receive interest with no tax deducted.
If you are resident in the UK for tax purposes and your total taxable income from all sources (including interest) is likely to be such that it is covered by your tax allowances, then you can register for interest to be paid without tax taken off. Registration has to be made on HM Revenue & Customs form R85 which, when completed, should be given to us. Copies of form R85 are available from our branches and HM Revenue & Customs Tax Offices.
If you are a non-taxpayer, but have not registered on a form R85 to receive interest without tax deducted, you can claim a repayment of tax from the HM Revenue & Customs by completing a form R40. If you have taxable income in the starting rate band of 10% and are due to pay less tax than the amount deducted from your interest, you can also claim such a repayment.
Registration for interest without tax deducted on an account continues in force for subsequent years until your circumstances change or, in the case of a child, until the end of the tax year in which they become 16. If your circumstances change and you become liable to pay income tax, you should notify us, in writing, as quickly as you can so that we can cancel your registration.
A comprehensive guide to the Taxation of Building Society Interest is available on the Building Societies Associations website.
The Building Societies Association has also produced an up to date consumer factsheet regarding paying tax on savings with building societies, with particular focus on customers who are eligible for the 10% tax rate.
Corporate Accounts
Interest will be paid net after the deduction of basic rate tax; or Gross without the deduction of tax for qualifying organisations who have submitted the appropriate identification.
