Starting Rate Band for Savings

If your income is less than £16,850, you may be able to benefit from receiving up to a further £5,000 of interest free of tax. The £5,000 band is reduced by £1 for every £1 of income above your personal allowance.

For those on low incomes, but receiving more than £2,000 in dividends, it may be beneficial to speak to your financial advisor about your investments about whether it is worth diversifying to more interest-bearing investments.

For participators in close companies who have directors’ loan accounts in credit, it may be possible to take advantage of this relief by charging their companies a commercial rate of interest.  In addition, “leap-frogging” dividend payments over two tax years can enable valid claims to reduce January and July 2019 payments on account.