Successive cuts in the dividend allowance and soaring interest rates have dragged many more taxpayers into a tax trap with the dividend tax relief now only £500 for the current 2024-25 tax year, down from £2,000 just two years ago.

The current savings allowance is £1,000 a year for basic rate taxpayers, reducing to £500 for higher rate earners, while top rate 45% payers do not get any tax-free interest.

The HMRC tool asks for gross savings interest to establish savings interest income, then asks about other taxable income, including employment, pension and taxable state benefits. Finally, the actual amount of taxable income before deductions, such as rental and self-employment income, and gross salary for PAYE.