The vast majority of students earn less than the annual taxable threshold ('personal allowance') of £6,475 for 2008/09 (this threshold generally increases each year). If you do earn less than this taxable threshold, you can receive any interest on your savings tax free (or gross), instead of having it taxed at 20% as banks and building societies do by law.
In order to get your interest tax free on your accounts, you need to go into a branch of your bank or building society and ask for your interest tax free. They will either do it on your computer or request you fill in a R85 form. Alternatively, you can download and complete the form from the link below and send it to your bank or building society (you will need to contact them to confirm the address to use).
- The form is available online in a printable format below (note it is a PDF):
- National Insurance and Income Tax - TSR guide to NI contributions and income tax payments.