Tax and savings /

Tax and savings

• Tax-free investments calculator
• Tax-free saving with NS&I
• Understanding gross or net interest

Tax-free investments calculator

If you pay income tax the money you work hard for has already been taxed once so you may be keen to avoid paying tax on your savings. Did you know that you can invest up to £93,600 tax-free with NS&I? Find out more with our tax-free investments calculator.

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Tax-free saving with NS&I

Many financial organisations offer tax-free products such as ISAs where any interest or income you earn is sheltered from the tax man, does not have tax deducted and does not need to be declared on your tax return. NS&I offers a choice of cash ISAs - two easy ways to start saving tax-free.

• Direct ISA
• Cash ISA

We also offer a unique range of other tax-free investments:

• Premium Bonds
• Index-linked Savings Certificates
• Fixed Interest Savings Certificates
• Children’s Bonus Bonds

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Understanding gross and net interest

Whether you are a UK tax payer and if so the rate at which you pay tax is a key factor in making a decision to invest.

You will need to find out whether the interest or return on the investment you're considering is tax-free, net or gross of tax. This will help to ensure that, when comparing rates between products and/or providers, you are comparing like for like.

Along with our interest rates we include details of tax information. For our tax-free investments we include the equivalent gross rates for basic and higher rate tax payers. For further information view our latest interest rates.

Gross interest

If you are a tax payer and you are receiving interest gross then you will need to declare any interest you earn on your tax return.

If you are a non-tax payer then you can keep your gross interest in full.

Net interest

Where interest is paid net, the tax is deducted before you receive the interest, at the applicable savings rate (currently 20%).

If you are a basic tax payer then you don’t need to worry about anything further.

If you are a higher rate tax payer then you will need to include details of the interest and the tax paid on your tax return.

For any information on tax, please visit www.hmrc.gov.uk.

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