However, you can not claim if you are a landlord claiming an allowance under the ‘Rent a Room’ scheme and owner of a property rented out as furnished holiday accommodation. LESA is a tax allowance (not a cash payment) that allows you to claim up to £1,500 against tax every year. This allowance can be claimed for properties you rent out in the UK and abroad. You can claim LESA for the costs of buying and installing certain energy saving products for properties you rent out, but only for what you actually spend.

You can claim LESA for what you have spent on cavity wall and loft insulation, after 6 April 2004, solid wall insulation, after 7 April 2005, draught proofing and hot water system insulation, after 6 April 2006, or floor insulation, after 6 April 2007. You can claim LESA up to 1 April 2015, when the availability of this allowance will end. Individual landlords have been able to claim the allowance since 6 April 2004 – for corporate landlords it’s been available since 8 July 2008.You can claim the allowance when filling in your tax return.
If you are an individual landlord, you claim the allowance when you fill in your self assessment tax return. You’ll need to fill in the costs of buying and installing the energy saving products in the Landlord’s Energy Savings Allowance box on the UK property pages if your property is in the UK, or the foreign pages under the section ‘Income from land and property abroad’ if your property is outside the UK. The amount you enter on the form is claimed against your taxable profits from renting out your property. This means when you fill in your tax return you deduct the amount you are claiming for this allowance from your income. This reduces the amount of tax you pay for the year.


You can fill in your self assessment form online or you can go straight to the form and fill it in on the HM Revenue and Customs (HMRC) website. If you install the energy saving products yourself, you can claim LESA for the costs of buying the products. However, you can’t claim LESA for your own labor and time for putting them in.
If you are a corporate landlord, you can claim LESA under ‘allowable business expenses’ on your corporation tax return form. You should go to business.link.gov.uk, a website providing advice for businesses, if you want detailed advice on how to fill in your corporation tax return.

The main elements of the Bill are to establish a Saving Gateway accounts scheme, as announced in Budget 2008, and give HM Revenue and Customs the necessary powers to administer it, including approving providers of the scheme and providing for penalties in cases of fraud and maladministration. It permits financial institutions to offer and operate Saving Gateway accounts and set out the duties of financial institutions in relation to the scheme, and allows the government to define who will be eligible to apply for accounts, and enable it to pay out matched funding to savers on account maturation

You will be able to open a Saving Gateway account if you get any of the following: Income Support, Jobseeker’s Allowance, Incapacity Benefit, Employment Support Allowance, Severe Disablement Allowance, and Tax credits – if you have an income below £16,040, Care taker’s Allowance. In the last mentioned case you must be in receipt of the allowance, not just have an underlying entitlement.

When the scheme launches in 2010, if our records show you qualify for an account, you will be sent a letter of invitation, an information booklet and a list of Saving Gateway providers by HMRC. You will be able to take your letter to any approved Saving Gateway provider and open your account. You will then be able to save as much as you like into your account for two years, with a top limit of £25 a month. At the end of the two years the government will add a reward of 50 pence for each £1 you’ve saved.

Every £1 you save will earn you an extra 50 pence. And you will be able to withdraw your savings should you need to without affecting the government reward you have earned up to that point. You will only be able to open one Saving Gateway account per lifetime, so make sure you open one at a time that’s right for you. The Saving Gateway was piloted in six areas of the country. Accounts were open from March 2005 to March 2007, and individual accounts lasted for 18 months.

If you were involved in the pilot you will still be able to open an account in 2010, if you meet the eligibility criteria shown above. If you had a pilot scheme Saving Gateway account and have any queries about your match payment or any other aspect of your account, please contact your local Halifax branch or call the Halifax helpline on 08457 263646. There will be more information about Saving Gateway accounts nearer to the launch in 2010, including who can get one, how to open one, and how it works. You don’t need to do anything else in the meantime. But it might be worth checking to see if you qualify for any of the benefits or tax credits mentioned above.

 how old you need to be to open the account
 how much money you need to open the account
 the interest rate that you get on your money
 how much money you can afford to put into a savings account
 whether you can make regular payments or just when you have some spare cash
 whether you will miss out on any bonuses or interest if you withdraw cash from the account

 how much you want to save and for how long before using it
 whether you can withdraw cash instantly, or have to give notice before you can take any money from the account

National Savings and Investments (NS&I) are the range of savings accounts offered to savers by the government. They are one of the safest ways to save your money. If you do want to open an account with National Savings and Investments, think about how long you want to invest for. Take a look at all the accounts that you can apply for and decide which one is the best for you.

If you are over 16 and want to earn interest on your money without having any tax taken away, cash ISA could be a good option. You can pay money into an ISA as often as you want, as long as the total amount you pay in over the course of a year is not above £3,600. They are ideal if you’re planning on going traveling in the next year or you are saving for a car and you know how much you are going to need by a certain date. ISA options are available from banks and building societies as well as National Savings and Investments.
If you want to put some money away to buy something big in a few months, or if you just want to make sure that you’re covered financially for anything unexpected, you should think about opening a savings account.

You must give your National Insurance number to HM Revenue & Customs (HMRC), your employer, Department for work and Pensions (DWP), if you claim benefits, your local council, if you claim Housing Benefit, and the Student Loan Company if you apply for a student loan. You will also be required to provide your National Insurance number if you open and Individual Savings Account (ISA). Entitlement to many benefits depends on your National Insurance contribution record. So it is very important that you keep your number safe and do not reveal it to anyone who does not need it. This will prevent identity fraud.

If you do not already have a National Insurance number you must apply for one as soon as you start work and as soon as you or your partner claims benefit. To be able to apply you must be over 16 years of age and a resident in the United Kingdom. If you are a parent or guardian and receiving Child Benefit, any children you care for will automatically get a card showing their National Insurance number just before they reach the age of 16
.

To apply for a National Insurance number you will need to telephone the Jobcentre plus National Insurance allocation service helpline on 0845 600 0643. They will make sure you need a number and arrange for you to undertake an evidence of identity interview. The interview will usually be one-to-one unless, for example, you need an interpreter. The interviewer will ask you questions about your background and circumstances.
The interviewer may also ask you to fill in an application form. If you do not have any official documents you still have to go to the interview. You might be able to prove your identity with the information you give at the interview.

Usually your employer takes the pension contributions from your pay before deducting tax (but not National Insurance contributions). You only pay tax on what’s left. So whether you pay tax at basic or higher rate you get the full relief straightaway. However, some employers use the same method of paying pension contributions that personal pension scheme payers use – read more in the section on ‘Personal pensions’.
If you’re a GP or dentist and contribute to a public service scheme you are taxed as self-employed for part of your earnings so should claim tax relief through your Self Assessment tax return. You pay Income Tax on your earnings before any pension contribution, but the pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. If you pay tax at higher rate, you can claim the difference through your tax return or by making a claim to HM Revenue & Customs (HMRC) by telephone or letter.
Unlike personal pension providers, most retirement annuity providers – personal pension schemes set up before July 1988 – don’t offer a ‘relief at source’ scheme whereby they claim back tax at the basic rate. Instead you will need to claim the tax relief you’re due through your tax return, or if you don’t complete a tax return by telephoning or writing to HMRC.
If you receive an age-related Personal Allowance or Married Couple’s Allowance HMRC will subtract the amount you contribute plus the basic rate tax from your total income and use the reduced figure to work out the value of your allowances. This may have the effect of increasing these allowances if your income was above the relevant ‘income limit’ that applies. There are limits on how much tax relief you can get – read more in the section ‘Limits on tax relief’.
If you don’t pay tax you can still pay into a personal pension scheme and benefit from basic rate tax relief (20 per cent) on the first £2,880 a year you put in. In practice this means that if you pay £2,880 the government will top up your contribution to make it £3,600. There is no tax relief for contributions above this amount.

You can save as much as you like into any number and type of registered pension schemes and get tax relief on contributions of up to 100 per cent of your earnings (salary and other earned income) each year, provided you paid the contribution before age 75. But the amount you save each year toward a pension is subject to an ‘annual allowance’.
For the tax year 2009-10 the annual allowance is £245,000 and for the 2008-09 tax years it was £235,000. You pay tax at 40 per cent on any contributions you make that are above the annual allowance.

NS&I currently offer eleven different products. These are split into the following
categories:

Tax-free: Some of NS&I products are tax-free. This means you do not have to pay UK Income Tax or Capital Gains Tax on any interest or prizes you receive. Currently, these are Premium Bonds, Index-linked Savings Certificates, Fixed Interest Savings Certificates, Direct ISA and Children’s Bonus Bonds.

Guaranteed returns: Guaranteed Growth Bonds, Index-linked Savings Certificates, and Fixed Interest Savings Certificates.

Income: Guaranteed Income Bonds, and Income Bonds.

Savings accounts: Investment Account, Easy Access Savings Account, and Direct ISA

Other: Guaranteed Equity Bonds

The number of products available and their details change from time to time. You can get the latest information by visiting the NS&I website, or by picking up a brochure from the Post Office and at selected WH Smith stores. If you believe that you may hold an investment which is no longer being sold by NS&I and would like further information, then please visit the ‘Products no longer on sale’ page on the NS&I website below. Alternatively, you can call NS&I free on 0500 007 007 – lines are open seven days a week, between 7.00 am and midnight. Calls from mobiles may not be free. Calls may be recorded.

If you are looking for somewhere to save that guarantees your savings are secure, NS&I may be a good choice. However, you may need to consider other savings and investment options if you would d prefer to accept some risk for the chance of higher returns. To assist you with your decisions you may want to visit ‘You & your money’, a website brought to you by NS&I containing practical independent financial information (see the link below). It is a great place to start if you are looking for a simple jargon-free resource on personal finance.
You can also pick up brochures summarizing some of the key sections from the site in selected WH Smith stores. Whatever your circumstances it is important you consider all the options available before you decide where to put your savings. If in any doubt, consult an independent financial adviser.

Banks and building societies usually deduct 20 per cent tax from the interest they pay on most types of savings account. But, if your total taxable income is less than your tax-free Personal Allowance, then you can register to get savings interest paid tax-free and claim back any tax you have paid unnecessarily. Taxable income includes money you earn from a job. But it excludes money you get from certain benefits and some other sources. Your Personal Allowance is the amount of income you can get tax-free and depends on your age and circumstances.

If your taxable income is only slightly higher than your tax-free allowances then some or all of your savings interest may be taxable at 10 per cent which is usually the starting rate for savings. If this applies to you, you will probably be able to claim some tax back if it has been deducted from your interest. The amount you can reclaim is the difference between the tax that was deducted and the amount that’s actually due.

To register to get interest on your savings tax-free you need to fill in form R85 ‘Getting your interest without tax taken off’ and send it to your bank or building society. Some banks and building societies also let you register by phone. You will have to fill in a separate form R85 for each bank or building society where you’ve got accounts. If you open a new account you’ll need to check your income and allowances and fill in a new form. If you are under 16, your parent or guardian will have to register for you. If you have turned 16, you will have to complete a fresh R85 if it is appropriate for you to continue getting your interest paid without tax off.

You can check if you can get your interest tax-free by filling in the table in the help sheet that comes with form R85. Or you can use the simple online checker on the HM Revenue & Customs (HMRC) website. If you think you have paid too much tax on your interest you can claim it back. To do this you’ll need to fill in a form R40 Tax Repayment Form. You’ll have to do this for each year you think you paid too much tax.

If you have overpaid tax you must claim it back up to 31 January five years after the end of the tax year (5 April) in which the overpayment was made. For example, a claim for the tax year 2003-04 which ended on 5 April 2004 must be made by 31 January 2010. Your income and tax allowances can change from year to year or even during the current year. So you may find your income goes up and your tax allowances no longer cover it. If this happens it’s important you tell your bank or building society straight away so they can start taking tax off your interest. Otherwise you may have a tax bill at the end of the year.

Savings accounts generally pay higher interest rates than current accounts. You can find them at banks, building societies and through National Savings and Investments (NS&I). They are generally low-risk investments suitable for short to medium-term savings. Savings accounts are deposit-based. This means you’ll usually get back the money you have put in plus interest, unless the bank or building society collapses. But if this happens, and as long as the firm is regulated by the FSA, the Financial Services Compensation Scheme may be able to pay compensation to customers, up to a set limit. Visit their website for more information.

There are other ways to save, for example for specific items such as Christmas hampers; or Christmas gift vouchers. You can also save in Christmas saving schemes and clubs run by supermarkets, large retailers, local shops, social clubs, pubs and workplaces. You usually save what you can, and then exchange your stamps or scheme for shopping, vouchers to spend, or you can buy other goods and services. With these options you’re not earning any interest on your savings so your money is not growing. You are also restricted to using the stamps for specific purchases depending on which type of shop you are saving with.

You can ask your bank to arrange for a set amount of money to be paid regularly from your current account into a savings account. This method is usually called a standing order. You do not have to save with the bank you have your current account with; you can shop around to find a bank with a better interest rate. You can use savings accounts comparison tools online to help you compare the features of different savings accounts and make a shortlist of to choose from.

If you are saving for the short to medium-term, say under five years, or you want a low-risk home for your savings, consider savings accounts. Bear in mind that, over the longer term, your money may lose its value because of inflation.

Most banks and building societies offer a range of savings accounts, including online accounts. To get the most out of your money, you’ll have to think about how much you want to save and for how long before using the money. It may be convenient to have a savings account with the same bank or building society as your current account. This way you can manage your everyday living expenses through your current account and quickly divert any extra cash into your savings. But bear in mind that you may be able to find a better savings account elsewhere. Having money in two separate places may be less convenient, but internet and telephone banking make sending your money to and from different accounts really easy.

National Savings and Investments (NS&I) are the range of savings accounts offered to savers by the government. They are one of the safest ways to save your money. If you do want to open an account with National Savings and Investments, think about how long you want to invest for. Take a look at all the accounts that you can apply for and decide which one is the best for you.

If you’re over 16 and want to earn interest on your money without having any tax taken away, a cash ISA could be a good option. You can pay money into an ISA as often as you want, as long as the total amount you pay in over the course of a year isn’t above £3,600. They’re ideal if you’re planning on going traveling in the next year or you’re saving for a car and you know how much you’re going to need by a certain date. Various ISA options are available from banks and building societies as well as National Savings and Investments.

Banks and building societies offer savings accounts just for children. Most adult accounts will usually have 20 per cent tax deducted on the interest before it’s paid, which is the case for most savings accounts. However, children, like adults have a Personal Allowance of £6,035 for the tax year 2008-2009. This is income they can receive tax-free. As long as their annual income (including interest) is below this amount, they’ll be able to receive interest without having the tax deducted (parents or guardians fill in a Form R85 for each account), claim back any tax they shouldn’t have paid (parents or guardians make a separate claim to HM Revenue & Customs (HMRC) using Form R40).

A child can not claim to receive savings interest tax-free if their income is above the personal allowance. But they will be able to reclaim some tax because they have not used the starting rate (10 per cent) limit for savings only (up to £2,320 above the personal allowance). You can give a child or invest on their behalf as much money as you like. But if you’re a parent or step-parent and the money you give your child earns more than £100 interest a year, this interest will be taxed as if it were your own.

The £100 limit only applies to parents and step-parents. Grandparents and other adults who give money to children are not liable to pay the tax if the interest exceeds £100 a year. If you give money to your children or grandchildren (or to children you care for) Inheritance Tax exemptions may mean that tax does not have to be paid on it. If you die within seven years of giving the money there might be some Inheritance Tax to pay.

There are a number of savings products which are totally tax-free and available only for children. If your child was born on or after 1 September 2002 and is eligible for Child Benefit, you’ll get a £250 voucher from the government (£500 if your income is no more than the limit for Child Tax Credit) to set up a Child Trust Fund. Once you have set the fund up anybody can add up to a maximum of £1,200 a year to it. There will be no tax on any interest or gains. The Child Trust Fund (CTF) is a long-term savings and investment account and the money cannot be withdrawn until the child is 18.

NS&I Children’s Bonus Bonds provide tax-free interest for children under 16, with an additional bonus if the money remains untouched for five years. NS&I bonds are available in ‘issues’ and each issue has its own rate of return. You can invest between £25 and £3,000 per issue, and there could be several issues in a year (normally coinciding with interest rate changes). Because NS&I Children’s Bonus Bonds are offered by National Savings & Investments they are backed by the government and are a safe way of saving. Application forms are available online or from the Post Office.

Parents and grandparents can also use other tax-free savings products which are available to adults on the behalf of children. As these are not specifically designed for children in some cases you will have to manage the account until the child reaches a certain age. You can invest from £100 to £15,000 for three or five years in Index-linked Savings Certificates. The value of the investment is guaranteed to keep up with inflation and the interest rate is guaranteed. You do not pay any tax at all. Children under seven need someone else to purchase the certificates on their behalf.