A million more people face taxes on savings A stealth raid by the Treasury and higher interest rates will see a million more Britons including many motorsport business owners start paying tax on their savings this year. While savers including many motosport business owners have seen interest rates rise from 0.1% to 4% since the end of 2021, a £1,000 tax-free allowance on savings interest has not been increased in line with inflation since it was introduced in 2016. Consultancy LCP, citing HMRC data, says frozen thresholds alone have dragged an extra 125,000 people into paying tax on their savings as a result of inflation. LCP partner Steve Webb, a former Pension Minister, says that when interest rate rises are factored in, the number of people expected to pay tax on their savings is set to rise from 1.4m when the policy was introduced to around 2.4m in 2023. He notes that when the Personal Savings Allowance was first introduced, “it meant that the vast majority of people would pay no tax on their savings,” but warns that “the world of 2023 is very different.” Mr Webb added: “If the intention of the original policy was to take ordinary savers out of tax on their savings, the rate of the savings allowance needs a serious rethink as it is no longer achieving its original purpose.”