Do you have savings but earn a low income? Almost everyone who lives in the United Kingdom (UK) is allowed to earn or receive income of at least £155 each week before tax has to be paid. The limits are higher if you are over 65, over 75 or born before 6 April 1935. If your income is below the limits and you have money in a bank or building society account which earns interest, you may be paying tax when you don't have to.

You can use a tool on the HMRC website which will indicate whether you should be filling in the form 'Getting your interest without tax taken off' (form R85). If eligible you would need to complete a form for each account held and submit it to your bank or building society. The form R85 is available on the HMRC website.

If your circumstances change and your income increases so that it is no longer covered by tax allowances you must notify your banks and building societies so that they can revert back to deducting tax from your interest payments. If this is not done, you may build up a tax liability for the year and be required to complete a tax return.

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