[wightsurf]

looking at my business account I notice that the interest was taxed . So my question is
how is this worked out as I have paid tax do I pay more tax

[JNESTIE]

Hi

The bank will automatically assume you are a tax payer and take 20% basic rate tax off you at source.  You need to include the interest paid and the tax taken off in your tax returns.

[andyM]

You're not paying tax on your money in the account.
You are paying tax on the interest that the money in the account has earned.

[wightsurf]

Yes that's right but don't I have to declare the money (interest) and if so how do I go about the tax on the interest.

[Pro-Smart]

Yes you do have to declare the interest earned - it's a question on your Self Assessment form. However, they phrase it so the 20% already deducted is taken into account. If you are a higher rate taxpayer then more tax will be deducted by your SA calculation.

[wightsurf]

Thanks that what I needed to hear.