SNP say no to double taxation on savings

SNP Treasury spokesperson, Stewart Hosie MP, has demanded action after it emerged that three million savers whose savings income falls into the 10 pence savings rate will actually be taxed at 20 pence and have to claim this overpayment back from the taxman.

Mr Hosie points out that for those savers who only pay at the 10pence rate and for whom the average tax payment is only £80 a year, the cost of employing an accountant to complete the complicated tax return to HMRC would almost certainly exceed the amount in overpaid tax they were claiming back.

Mr Hosie said:

"The recent letter to all members of this year's Finance Bill Committee confirmed that three million taxpayers have some savings income which falls into the 10 pence savings rate.  Information from Customs and Revenue (HMRC) proves that the average amount of tax to be paid this year for those with no other taxable income is £80.
 
"The Treasury confirmed that 750,000 already make a claim for re-payment or submit a tax return - but as even the discounted cost of having an accountant do this can be in excess of £100, it is simply not worth it for tax payers with modest savings income.

“Far from encouraging savings and investment this will punish all those who try to put money aside.
 
“The full impact is still unfolding, but it seems clear that millions of those with modest savings will be counting the cost.

“The Chancellor is adding insult to injury when he says people will be able to claim back tax.  The reality is that the cost of employing an accountant to complete a complicated claim will either exceed or eat up any benefit.

“For people who depend on modest savings, such as pensioners, this will be badly felt, and the Government must speed up the action it is taking to ensure nobody loses out.”