From 6 April 2015, the starting rate of income tax for savings income will drop from 10% to zero and the band which this applies to will increase from £2,880 to £5,000. This will apply if your earnings or pension income is less than £10,600 (the personal allowance). In this scenario, if your interest from savings is less than £5,000, you will have no tax to pay.
HMRC have issued a briefing note which gives examples of situations which would benefit from this. If this is something you can benefit from, you can apply to have your bank interest received gross, which will save you the hassle of having to reclaim the tax back. This is achieved by completing form R85 and sending it to your bank.
HMRC have provided detailed guidance and an online calculator, which can be accessed here.
