What tax rate applies on bank or building society interest?
Standard UK bank account interest is taxable as savings income. The Personal Savings Allowance exempts the first £1,000 of interest for basic rate taxpayers or £500 for higher rate taxpayers. Interest above these allowances is taxed at your marginal income tax band – 20% basic rate, 40% higher rate or 45% additional rate. Non-residents may have interest paid to them gross without deduction of tax.