It is expected that there will be three million of these bonus payments made this year.
For tax, they may have to be declared on the next tax return as they are classed as interest income.
Depending on the total bank interest received in the year, you may not have to pay tax on them.
There is a £1,000pa tax-free interest income allowance for basic rate taxpayers and a £500pa allowance for higher rate taxpayers.
However, due to the increase in interest rates you could find that you may actually exceed the allowance when all your interest income is added together for the tax return to 5th April 2024.
If you have any queries regarding interest payments and the tax return, please do contact me. There is no charge for an initial email consultation.
