The latest figures were released by HMRC following a Freedom of Information Request made by a campaign group, who have stressed that the way in which savings are currently tax needs to be changed.
Currently savers are charged the basic twenty percent rate of tax on interest paid on savings accounts, but there is a lower ten percent rate applicable to those on low incomes with savings of up to £2,560 above their personal tax free threshold.
However, the campaign group have argued that the situation for qualifying savers is complicated and the lower rate is difficult to claim; whilst the figures released from HMRC which relate to the reclamation of overpaid tax on savings income in the 2009/ 2010 tax year, show that 3.5 million savers would have been liable to tax at ten percent, rather than twenty percent.
Following the release of the figures, the campaign group have argues that the current tax system in regard to savings penalises the poorest, whilst the way in which lower tax rates on savings operates is poorly understood and ineffective.
The group also claim that better-off savers are given generous credit terms to pay their tax whilst the poorest have to overpay immediately and then reclaim the overpayment.
For more information, please visit www.moorethompson.co.uk
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