While Google have sneakily dropped their ‘don’t be evil’ motto, they’re finding that people are coming after their tax, along with other companies like Starbucks and Apple.
Basically, big-ass businesses have been enjoying a variety of loopholes so they can sidestep billions in tax, but that could well be a thing of the past, thanks to a worldwide clampdown. World trade body the Organisation for Economic Co-operation and Development (OECD) announced that they are looking at getting back some of the £160billion they reckon they’ve lost to tax avoidance by multinational companies.
The OECD say that this ‘seismic shift’ in international tax rules is going to force the hand of these massive companies, where they’ll have to cough-up the money that is due, as they ban ‘brass plate’ operations in low-tax territories and outlaw dicky loans between companies.
“This is coming to an end,” said OECD head of tax Pascal Saint-Amans, aiming to help “local companies that cannot benefit from loopholes in the international system”. Finance ministers from around the world are going to meet up, to look over the plans. Over 60 countries have already agreed to them.
Saint-Amans added that many tax laws date back to the 1930s and are “not fit for purpose”, which has led to “more and more aggressive planning from companies”, which will have “a major behavioural impact” on large firms.
Next week: Huge businesses find a different way of not paying taxes.
Things are looking up! Even HMRC are getting better at dealing with customers, even if the proportion of complaints upheld by the Adjudicator’s office has only dropped by 5% it’s a start. Right?
The adjudicator’s office has just released its annual report for 2014/15 which shows similar numbers of complaints about HMRC, although a slight improvement on last year’s report with now only 85% of complaints being upheld. While the adjudicator acknowledges that many of the serious complaints about HMRC relate to one specific bad-apple department (benefits and credits), sha also noted that HMRC show “a somewhat limited appetite for reflection and learning from their interaction with customers.” Nice. 1108
Out of the 1,102 total complaints received by the adjudicator’s office, 95% related to HMRC- 1,044 new complaints, just slightly fewer than the 1,087 received in 2013/14. Of the cases cleared this year, the adjudicator upheld a whopping (although improved) 85% either partially or substantially.
The adjudicator also mediated 39% of cases directly between customers and the department and praised HMRC for getting much better at dealing with customers and complaints around PAYE but noted that the latter half of 2014/15 saw a rise in complaints from Benefits & Credits customers about tax credits. But these two areas are still very much determined in the customers’ favour- the number of PAYE complaints upheld decreased to 91%, but for Tax Credits the upheld rate increased to 93%.
In particular, the adjudicator “remains critical” of the number of complaints where HMRC staff failed to consider the circumstances of their ‘vulnerable customers’, and urged the departments to use their discretion. What has also been highlighted in this year’s report is the amount of compensation paid by HMRC in respect of their rubbishness- on occasion, the adjudicator may recommend that HMRC pay a monetary sum to customers in recognition of the poor level of service they received, and any relevant costs. And this compo adds up to quite a tidy sum:
However, the report does suggest that HMRC have implemented new customer care procedures, meaning that this time next year it’ll be a totally different story. Right?
The boss of the Wetherspoons pubs is not happy about having to pay his staff more money. Tim Martin, the chairman of the budget pubs, has reported that the chain has seen a 25% fall in profits, and this National Living Wage isn’t helping.
Martin says that pubs are under too much unnecessary pressure, thanks in part, to the VAT that pubs are charged, compared to supermarkets.
Of course, the National Living Wage is a hot topic at the moment, with Costa and Next giving everyone the doe-eyes, talking about how much it will hamper their profits. Tim Martin is echoing that, reporting a drop in pretax profits to £58.7m for the year to 26 July.
Now, looking at the numbers, Wetherspoons have seen a rise in bar and food sales, with revenue from their gamblers down. The biggest loss actually came from one-off items, which included an £11.2m write-down on the value of pubs that are under-performing. When you lose all this lot, profits were actually down 2%, thanks in part to higher wages.
That’s not to say that Martin doesn’t have a point about the disparity between the VAT paid by pubs and supermarkets. Pubs are charged 20% VAT on food sales, while supermarkets are charged nothing, which means the shops can subsidise their booze. Supermarkets then, will be better equipped to deal with the National Living Wage better than pubs will, in his eyes.
He said: “By pushing up the cost of wages by a large factor, the government is inevitably putting financial pressure on pubs, many of which have already closed. This financial pressure will be felt most strongly in areas which are less affluent, since the price differential in those areas between pubs and supermarkets is far more important to customers.”
“It is certain that high streets in less affluent areas, which already suffer from serious problems of empty shops and dereliction, will suffer further if pubs and other labour-intensive businesses close.”
Looks like the helpful sorts over at HMRC have excelled themselves again. This time it’s Citizens Advice having a go, claiming that their latest social media research shows an average call wait time when ‘phoning HMRC of over 45 minutes, which is still, clearly, not good enough.
The Twitter study of 34,000 tweets made between August 2014 and August 2015 compiled by Citizens Advice, showed that over the last year 11,500 frustrated callers turned to Twitter to complain, where on average, those who tweeted had to wait an average of 47 minutes before their call was answered. The official waiting time is supposed to be 10 minutes. Citizens Advice further calculated that hanging on the line to HMRC for 47 minutes will, in many cases, cost consumers £4.66 in call charges.
In one case, someone tweeted that they had tried to get through to HMRC on four occasions, and waited an hour each time.
“People are paying the price for not getting through to HMRC,” said Gillian Guy, the chief executive of Citizens Advice.
“From fines for not completing a tax return in time, to under or overpayments for tax credits, people can be left out of pocket because they cannot speak to HMRC on the phone.”
In June, HMRC official figures showed that 17 million calls to HMRC went unanswered in the previous year- out of the 64.7 million calls made by taxpayers between April 2014 and March 2015, 27.5% – 17.8 million – were either unanswered or resulted in a busy tone.
This caused Chief Executive Lin Homer, who is due to appear before MPs on Wednesday afternoon, to apologise for a service that was “not up to scratch”, with HMRC setting a target to answer 80% of calls, which might sound impressive, but would still potentially represent almost 13 million missed calls.
An HMRC spokesperson pooh-poohed the Citizen’s Advice figures, saying: “We are sorry that some customers have struggled to get hold of us, but this unscientific and out of date survey of tweets does not represent the real picture now.”
“In reality, answer rates on our phones are improving and wait times are falling.” HMRC said it had recently taken on an extra 3,000 staff to try and lessen the delays.
We talked about airport shops doing you out of money, and now, the government have actually noticed. No, honestly.
Government people are now joining in the complaints that are saying airport shops need to cut their prices after it turned out they weren’t passing on VAT discounts to passengers.
Treasury minister, David Gauke, said: ”The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops. While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to.”
“We urge all airside retailers to use this relief for the benefit of their customers.”
Of course, you can urge businesses all you want and they still might not listen. Obviously, to make something happen, you need to threaten them with something. As yet, no-one at the government is promising to do anything official, other than moan about it and hope that businesses have a sense of fairness.
Steve Baker, a Conservative member of the Treasury select committee, echoed the sentiment of being diddled out of pennies, saying that passengers were being “ripped off”, adding: “Consumers are entitled to expect that tax savings will be passed to them rather than become another addition to the bottom line for companies.”
“I always thought that showing a boarding pass was an official requirement.”
The boarding pass issue focuses on the fact that airport shops ask to see your boarding card, even though it isn’t an actual requirement. Basically, the only reason airport shops ask to look at them, is so them can use them to claim VAT relief on all sales relating to people who are travelling outside the EU.
Seeing as it isn’t a legal requirement for passengers to show their boarding cards when buying stuff at airports, next time you’re in one, try telling them that you’re not prepared to show them and see what happens.
Everyone now knows that smoking is A Very Bad Thing, and the Government have been taking this as carte blanche to slap as much tax as humanly possible on those evil little sticks of icky stuff. In fact, over the past five years, taxes on tobacco products have risen by 40%, meaning that tax is now around three-quarters of the price of a packet of cigarettes- the highest in the 28 states of the EU. But have the Government pushed smokers too far? A major new survey of over 12,000 adult smokers suggests that consumers are now turning to‘non-shop sources’ to avoid paying the excessive taxation-resulting in a massive loss to Treasury coffers.
The poll, by Mitchla Marketing/Survey Sampling International, is one of the largest of its kind and received input from law enforcement officials and surveyed smokers nationwide.It found almost one third (29 per cent) of smokers are now buying tobacco products from ‘non-shop sources’ due to the excessive costs in the UK.
While cigarettes (and to a lesser extent, alcohol) have always been seen as a no-brainer for levying taxes- after all the demand is considered ‘inelastic’, meaning no matter how much the price rises, the demand will stay the same- it seems there does become a tipping point at which demand doesn’t fall, but desire to do the right thing in respect of UK duty, does. This large increase in ‘non-shop’ alternative shopping has caused the Treasury to lose an estimated £2.6 billion of tax revenue every year.
The survey found that the primary reason smokers were buying non-UK duty paid products was due to the high prices in the UK – UK smokers buying a premium brand of 20 cigarettes duty-paid are charged over £9, while 87% of those buying from ‘non-shop’ sources pay under £5.
The survey also found that over half of smokers (51%) plan to buy tobacco products from abroad and bring back as many as they legally can (although almost half of those don’t actually know how many they can bring back, which depends whether you are travelling from inside or outside the EU, of course). Almost one in five smokers (17%) now regularly buy their tobacco from abroad to avoid paying UK duty and 78% of smokers said they had no objections to buying fags without UK tax, so long as it was legal, i.e. from abroad rather than from the back of a van.
Of course, cigarettes for ‘personal use’ can be brought back in potentially unlimited quantities from EU countries, but even within the EU, UK fags can cost up to sixteen times more- in Belgium smokers pay £4, in Spain £3.80 and in Moldova just 57 pence for a packet of 20 cigarettes- so it’s no wonder savvy smokers are buying cheap without paying UK tax.
Giles Roca, Director General of the Tobacco Manufacturers’ Association (TMA) said: “This survey shows that excessive taxation on tobacco products is forcing up prices and driving consumers away from legitimate sources. This is clear proof that the government’s high tax tobacco policy is not working.”
Naturally, non-smokers are probably far happier with the amount of tax levied on cigarettes, given the amount of revenue it brings in that can be used to fund the NHS for example, treating all those nasty smokers’ coughs. But what happens if the balance tips and the maximum revenue is earned at a slightly lower tax rate, meaning smokers can’t be bothered to try and get their fix cheaper?
Retailers who ply their trade in Britain’s airports are being asked to come clean about the millions of pounds in VAT discounts they’re making on duty free items, which of course, saves them loads of money which they’re not passing on in savings to customers.
So what’s this about? Well, have you ever wondered why airport shops ask to see your boarding cards at the checkout? Well, this is not a legal requirement, but rather, the information the retailers are getting off them is so they can avoid paying 20% VAT on everything they flog to those travelling outside the EU.
That Paul Lewis fella says: “I think the problem here is that the retailers are not being straight with the public. They are asking to see passengers’ boarding cards but not telling them that this is so they can make more money by not paying the VAT on what they’re selling. What of course they should be doing is passing on the savings that they make to the passengers who are travelling outside Europe.”
“The problem is, though, that they have got a captive audience,” he continued.
Of course, airport shops are a swizz and ‘duty-free’ hardly ever means ‘noticeably much cheaper’. All it really means is that the retailers themselves are not paying duty. In the case of Boots, their airport stores charge customers all over the country the same amount as they charge in London stores, even though they avoid paying 20% tax on everything they sell to those travelling outside the European Union.
HMRC have said that there’s no need for stores to pay VAT on goods sold to passengers leaving the UK: “Duty free shops may treat the sale of goods to passengers intending to take them to non-EU destinations as zero rated exports, provided they retain suitable evidence such as by scanning the boarding card.”
“There is nothing in VAT law to require the production of a boarding pass to purchase goods in airport shops, but without such evidence the supply cannot be zero-rated as an export.”
“HMRC cannot comment on the pricing policies of individual retailers.”
Be prepared to be blown away! You’ll barely be able to believe what you’re about to hear! Staff at some of the biggest banks in the UK, aren’t able to answer basic questions about tax and savings accounts.
This is according to the folks at Which!!! who have been going hard on some mystery shopper action. They found that almost 1 in 10 staff couldn’t tell them whether tax was automatically taken from interest in savings accounts, while 40% of them had no idea how much was deducted.
Which!!! also found that staff didn’t know much about the ways non-taxpayers can stop tax being deducted, or how to claim back tax that has been overpaid.
Of course, most customer-facing staff in banks aren’t trained very well and, of course, aren’t paid particularly well, which means those who would be experts in such matters are probably working elsewhere, for better wages. However, there’ll be enough people who think bank staff should know more.
Which!!! asked the following questions.
‘Is tax deducted?’ – 1 in 10 call handlers answered incorrectly, with one Barclays agent suggested that anyone on a pension wouldn’t be taxed and another from HSBC put their researcher on hold twice while trying to get an answer – and then came back with the wrong one.
‘How much is deducted?’ – Which!!! wanted to hear that 20% tax was automatically deducted, however, 42% of those asked couldn’t answer the question. Barclays and TSB were judged to have been the worst.
‘If you don’t pay tax, what can you do?’ – Which!!! wanted to hear about R85, the form you submit to banks to stop tax being taken from your interest. Not one of the banks scored 100% on this question, but Halifax, Yorkshire Building Society and First Direct scored highly.
‘What can you do if you’ve overpaid tax?’ – This is where someone should tell you about the R40 form, where you can claim back overpaid tax. The banks did not do well on this.
So, in terms of doing well, Halifax, Yorkshire Building Society and First Direct came out on top, while at the bottom of the pile, you’ll find Barclays and NatWest.
Are you married? Well done you. You must be thrilled and exponentially more lonely as you’ve irritated everyone on Facebook with your incessant cooing and 3,000 wedding photos that look like everyone else’s stupid wedding photos.
Anyway, if you’ve got married and are earning £10,600 or less in the 2015 to 2016 tax year, you may well be able to reduce your partner’s tax by up to £212 thanks to the new Marriage Allowance.
It isn’t a huge amount of money, but it is worth getting on it, as basically, it is free money for doing absolutely nothing of note. Tories love people getting married and, in their minds, marriages stop things like riots from happening, so there you go.
So, grab all your personal details ever, and head over to the government’s dedicated website for Marriage Allowance and get registered, by clicking here.
If you’re married and earn a higher amount than the threshold, then maybe you can sell all those spare toasters you got from your wedding day? If not, maybe you could moan about it and be passive aggressive with your beloved while you shop for matching fleeces?
Well, George started his speech this afternoon by saying he was presenting a ‘Budget for workers’ and it was certainly very interesting. Here’s a round up of the main things that could affect your pocket from the Chancellor’s announcements.
Child Tax Credits/Universal Credit
Widely tipped to be for the chop, the Chancellor duly cut Child Tax Credits and Universal Credit in a fairly hefty way. New claimants will not get the family element of tax credits and will be limited to claims for two children only. Existing claimants will see the earnings cap, before which amounts are not reduced, brought down from £6,420 to £3,450, with the taper rate on earnings above that level increased to 48%. The income disregard for income fluctuations between years will also be reduced from £5,000 to £2,500. The overall benefits cap will be reduced from £26,000 to £23,000 in London and £20,000 elsewhere.
National Living Wage
Totally taking the wind out of Labour’s sails, the Chancellor’s announcement of a £9 per hour minimum wage for the over 25s by the end of this Parliament will be welcomed across parties. The NMW rate will increase to £7.20 from next year. George is, of course, assuming that employers will have to pay people more so that they won’t notice the reductions in tax credits. Which is a great idea in theory, but many are predicting that those earning slightly more than hardly anything, who will see the biggest cuts in tax credits but the smaller increase in wages, will miss out.
But the idea of getting employers to pay more towards a living wage is accepted as a reasonable one, and giveaways like increasing the employers NI exemption for small employers and a reduction in corporation tax rates by 2% over the next five years.
Tax on individuals
Working towards his 2020 targets, the Chancellor announced that the personal allowance will go up to £11,000 from April 2016 (£11,200 for 2017/18), and at the same time the point at which the 40% tax rate kicks in will also go up to £43,000 from the current £42,385 (£43,600 for 2017/18).
However, the most radical change is that relating to dividends. Currently, dividends are subject to special rates, but benefit from a notional tax credit to reflect the corporation tax paid by the company. However, the Chancellor announced a new idea to scrap tax credits altogether, and make the first £5,000 of dividend income tax-free, with the next basic, higher and additional rates of tax being recalculated to be 7.5%, 32.5% and 38.1% respectively. This move should only make those receiving high levels of dividends end up paying more tax.
Pensions tax relief will be further restricted and the Government is consulting on changing the pension relief regime totally- mooting the idea that pensions would become more like ISAs, receiving no relief on the way in, but being tax free on the way out- another move that would penalise those paying tax at higher rates.
Additionally, no IHT will be due when passing down a family home worth up to £1m.
There were a number of other things crammed into the Budget, and as widely predicted, non-doms who live in the UK will see their tax advantaged status withdrawn after being UK resident for 15 years. Fuel duty remains frozen and the rent a room relief threshold will go up to £7,500. Interesting, but likely bad news for landlords- from 2017 mortgage interest will only be deductible from rental income to the extent that it gets relief at the basic rate of tax (20%) rather than at higher rates.
Those aged 18-21 are coming off quite badly, with a ‘youth obligation’ to earn or learn (meaning it will be much harder for them to get any benefits) and the withdrawal of housing benefit for these groups. But don’t think about going into higher education- at the same time, University maintenance grants will be withdrawn and replaced with additional student loans.
Finally, new classifications for new cars paying road tax will come in, with most cars paying a ‘standard’ rate of £140 per year, which is lower than the current average of £160. Second hand car rates will remain and no one will end up paying more than they currently do. Interestingly, road tax money is to be ring fenced to actually start paying for roads. What a novel idea.
So, as with all Budgets, there are winners and losers. Losers will include those currently claiming tax credits, even if they are the workers the Budget was aimed at. You will be a winner if you have a house worth £1m.
Amazon are doing great in the UK, shifting £5.3bn in sales from British shoppers. Not bad eh? Well, as per, there’s an issue with how much tax they’re paying. Apparently, they paid £11.9m in corporation tax last year, which barely buys a decent centre forward these days.
Accounts filed at Companies House show that Amazon.co.uk made a profit of just £34.4m (in the 12 months to 31 December) which means they only had to pay a relatively small amount of tax. However, seeing as people in the UK account of 10% of Amazon’s entire sales, something is going awry here.
Only last month, Amazon announced that they’d started booking UK sales through a British subsidiary after they’d sent their European sales through a subsidiary in Luxembourg for years. Of course, in Luxembourg, everyone enjoys lower tax rates!
The government are keen to get this all sorted out, and you’d expect that all these big businesses will be looking at moving their UK-bases to somewhere else, to increase profits. It is something that the Chancellor will have to play very carefully, or a load of big businesses will be off so quickly, we won’t see their arses for dust.
Of course, Google, Apple and Facebook are all facing similar criticisms too, and between them, they employ a lot of people in the UK.
According to reports, Facebook paid annual corporation tax of £3,169 here, which is absolutely remarkable. It is amazing what a creative accountant can do with numbers.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “You can understand people’s anger at organisations like Amazon perceived not to be paying their fair share, but our frustration should be focused on the politicians and bureaucrats who have created our ludicrously complicated tax code.”
Times have been tough, and what with summer holiday season coming up, who wouldn’t like a nice little extra in their pocket? Well, it seems there is a quick and easy way to get some spare cash, and all you have to do is snitch on your ex-partner/significant other/neighbours to HMRC…
New figures show that backhanders payments to tax informants have jumped by almost 50% in the last year. In 2014/15 a record £600,000 was paid to people who had reported suspected tax dodges by calling HM Revenue & Customs’ (HMRC) confidential telephone hotline, with around 100,000 calls made, compared with £402,000 paid out the year before, and a similar amount (£395,000) in 2012/13.
Now, mathematicians will have spotted that £600,000 in payments compared with 100,000 calls does not add up to a fat lot of cash per call. But many of the callers to the helpline do not necessarily have a pecuniary motive behind the call. The majority of people who tell tales on report the tax affairs of others are bitter ex-wives (or husbands) or disgruntled former work colleagues. Sources suggest that a reward of between £50 and £1,000 is most commonly given, but only if the information leads the taxman to a “big win”. Of course, should you have extremely lucrative information, that could also translate to a higher pay out.
But why have the amounts gone up this year? Either people are just getting grumpier with each other, or people are wising up to the fact that, if they are inclined to share some juicy details with HMRC, they may as well be compensated for their trouble.
The ‘hotline’ for tax informants was set up in April 2006, and launched with a £1 million advertising campaign that showed a worker ‘getting away’ without paying tax. However, what is less widely publicised is the fact that HMRC have discretion to pay you for your information- after all, if you’re going to do it, you might as well do it properly. Adam Craggs, a tax partner at law firm RPC, suggested insightfully that “if too many people know that they can get paid for information supplied to HMRC they may be less willing to provide information for free.”
A spokesman for HMRC said: “The majority of people who provide information to us do so without any expectation of a financial reward. Cash rewards are discretionary and based on what is brought in as a direct result of the information provided.
“We receive information from a wide variety of sources and it is always used to make sure everyone pays what they should.”
Now, the only question that remains is- are HMRC backhanders undeclared income too…?
Controversial alternative taxi firm Uber has now been hit by a new campaign by black-cab drivers in London, and this time it’s war. The Licensed Taxi Drivers Association (LTDA) said the campaign is to “highlight what we are up against” and sees taxis and billboards across London slapped with posters claiming that Uber does not pay tax in the UK.
Uber burst onto the scene as a cheaper and easier alternative to traditional cabs in London. Many consumers like the convenience and affordability but ‘proper’ taxi drivers in many cities are understandably peeved that Uber does not appear to be subject to the same stringent regulations. Following concerns, Uber has been banned in a number of cities across the world, together with questions over the adequacy of its driver checks.
The posters show Uber’s senior vice president of policy and strategy Rachel Whetstone and Prime Minister David Cameron, with whom she is friends, beside a picture of Chancellor George Osborne – with an incorrect sum adding up to the fact that Uber apparently pays no tax in the UK.
“These ads are not anti-Uber,” Steve McNamara, general secretary of the LTDA told the BBC.
“The campaign is designed to highlight that the lobbying arm of Uber, a $50bn US company, has its tentacles embedded deep within Whitehall.
“The irony is that UK tax payers are subsidising Uber, a company that pays no tax in the UK, through tax credits and other DWP (Department of Work and Pensions) benefits paid to Uber drivers earning less than minimum wage.”
Uber, whose head office is in the Netherlands, said in response: “The campaign is simply incorrect. We pay taxes in every country we operate in and comply with all local and international tax laws, this includes the UK.”
Last year, Uber’s tax affairs were referred to HMRC by Transport for London following a complaint from Labour MP Margaret Hodge that it was opting out of the UK tax regime. The campaign will initially feature on 250 cabs, three advertising vans and on more than 25 digital sites across London.
There’s been long grumbles about Amazon’s way of doing business concerning e-books, and this probe will look at certain clauses in Amazon’s contracts with publishers, which are thought to be relating to the protection Amazon get from publishers offering rivals more favourable terms.
Margrethe Vestager, heading up the EU’s competition policy squad, said that she has a duty to make sure that Amazon’s arrangements with publishers were not harmful to consumers, by “preventing other e-book distributors from innovating and competing effectively with Amazon.”
“Our investigation will show if such concerns are justified.”
Of course, the EU is already snooping around Amazon, concerning their tax arrangement in Luxembourg. As we know, some gigantic companies are paying as little as 5% in corporate taxes, while smaller companies are stumping up 30%.
A potential double whammy of fines on the horizon, if Amazon are found guilty of being thoroughly shifty. We await the outcome.
You may recall that, in March’s Budget the Chancellor announced a new plan to take 95% of savers out of tax on the interest on their savings. However, rather than wait until April 2016 to take advantage, why not start earning tax-free interest now. Interested?
You see, the new limits of £1,000 worth of interest for basic rate taxpayers, and £500 for anyone paying higher rate tax (if you pay additional rate tax at 45%, the Government reckon you can do without the savings allowance), take effect from April 2016,and at that point, given the vast majority of taxpayers won’t be paying tax, banks will stop deducting 20% tax at source (ie before you even receive your interest payment, as they do currently). However, if you are savvy enough to open an account that doesn’t pay interest until after 5 April 2016, then all of the interest falls into the 2016/17 tax year, and the new savings allowance applies.
And it’s official. A spokesman for HMRC told The Telegraph: “If a savings product, such as a one-year bond, taken out now, pays out interest before April 2016, the saver will not be able to benefit from the new personal savings allowance as they have a right to access interest before April 2016. But if they cannot touch the interest before April 2016, the saver can take advantage of the new allowance.”
So, what you are looking for in order to facilitate this wheeze are accounts that only pay interest annually. You might consider the market leading Virgin Defined Access E-Saver, which pays 1.41% gross, which would allow a basic rate taxpayer to stash £70,920 into the before breaching the savings allowance threshold, halved to £35,460 for higher-rate taxpayers. However, closer inspection of the terms and conditions reveals that the annual interest isn’t paid on the anniversary of account opening, but is instead credited on 11 March each year. Which means the interest will be taxable, and the net equivalent is reduced to 1.13%
Consequently, the second best product on the market, the Paragon Bank Limited Edition Easy Access, begins to look more attractive, given its rate of 1.35% gross paid annually on the anniversary of the account opening, and therefore tax free so long as it falls within the savings allowance amount.