Ziknik - thanks for posting that; if anyone else has a similar issue they can search for it, I think, so it will be very helpful.

Cat

I found the answer to my own question.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4015739

> Tax is charged on your interest at a rate of 20% as standard

> If you are a 22% tax payer, you don't need to do anything.

> If you are a 0% tax payer, it is your own responsibility to fill out the forms at your bank to stop the 20% tax payment

> If you are a 10% tax payer, you pay 20% tax and then claim the other 10% back at the end of the finacial year from Revenues and Customs

> If you are a higher rate tax payer, you must inform the Tax Office and arrange for the payment of the HRT

I am not a higher rate tax payer. My wages are small. But, the same account also receives dividend payments from my ltd company. So, it probably looks as if I am actually earning over the HRT limit to the bank.

is your wages paid into your bank ? if so they know how to tax you , H R T or STANDARD RATE.
check out the hsbc rates carefully, you have not mentioned if you are a H R T or standard tax payer ?
if you are a H R T payer i cannot see how hsbc can offer you a better deal than an ISA.asyou will be paying more tax and ISA'S are tax free.

How do the banks know whether or not to apply the Higher Rate of Tax (HRT) to your savings accounts? Do they ask you? Ask Revenues and Customs?

I’m thinking of putting a monthly amount into a HSBC regular saver instead of my ISA (at Yorkshire BS). I’m thinking that the regular saver account will pay me a higher rate of interest even after the standard tax rate.

(I don’t earn enough to pay the HRT on my wages).