Interest and VAT partial exemption

From 5 February 2009 to 15 June 2022 the Bank of England base rate was 1% or less – indeed for much of that time it was 0.5%. By 3 August 2023 it had risen to 5.25% before falling again by now to the levels that were more normal before the 2008-09 financial crisis. It is a cash flow shock to have to pay those ‘normal’ rates on mortgages and other borrowings but there are also tax issues arising from receiving a higher return on deposits. There will be plenty of people who have not a tax liability on non-ISA interest for years because the pitiful amount was covered by the savings allowance – how many of them will fail to notice that they now need to report excess income to HMRC and will receive an enquiry in due course? After all HMRC does...