Stand-out Q – zero savings rate
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Can a client, aged 60, take advantage of the zero percent starting rate in 2018/19 if their earned income exceeds £16,850?
No. If the client had earnings of £16,850 and savings of £2,000, their earnings would be equivalent to the personal allowance of £11,850 and the starting savings rate limit of £5,000. Their earnings exceeding the personal allowance would be taxed at 20%. The first £1,000 of savings income would be covered by the personal savings allowance with the remaining savings income falling within the basic rate band
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