If Fred also had savings that were not in an ISA, how would interest on this be taxed? What rate of tax would he pay on it?
On 1st July 2021, Fred was appointed as a musician in an international hotel chain earning £18,000 as a basic annual salary. In addition, he received a monthly commission of £250 for evening performances during the 2021/22 tax year. He received a diesel car worth £28,000 with CO2 emissions of 157g/km from his employer. His employer contributed £250 towards his fuel expenses each month he had the car. He was pleased to be provided with a work mobile, paid for by his employer, worth £599, and his employer paid for his annual eye test at the opticians.
Fred recently invested a legacy on the London Stock Exchange, earning dividends of £2,440. He also holds a cash ISA which earned £645 interest.
If Fred also had savings that were not in an ISA, how would interest on this be taxed? What rate of tax would he pay on it?
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