Interest earned from savings is taxable, according to the table below.
Tax rates for savings
Basic rate taxpayer
Higher rate taxpayer
20% on annual interest earned above £1000
40% on annual interest earned above £500
Matthew is a higher rate taxpayer.
Therefore, any savings interest he earns over £500 within a year is taxed at 40%.
On 1st May 2016, he invested £150 000 in a savings account that pays interest at a
rate of 1.98% per annum.
Savings interest is added at the end of every month.
Calculate the date when the interest that Matthew earned went above his annual tax-free
limit.