PERHAPS the most surreal experience I have had recently was doing an interview for BBC Radio 5 Live sitting in a campervan in Norfolk with a collie pup sitting on my lap. Fortunately she refrained from playing with her squeaky toy until we had finished recording.

The interview was about the changes for savers in last month’s Budget and tips for the new tax year.

The first bit of good news for savers was the increase in the Individual Savings Account (ISA) limit to £11,880 from April 6, 2014 and then to £15,000 from July 1, 2014.

The rules have also been greatly simplified. Money in an ISA is sheltered from income tax and capital gains tax and making use of the annual allowance each year can over time accumulate a very significant investment producing tax free income.

The Junior ISA limit – for those under 18 - has also been increased to £3,840 from April 6, 2014 rising to £4,000 from July 1, 2014.

Another piece of good news was the increase in the tax band for savings income (but this increase doesn’t come in until April 6, 2015 and not everyone will be entitled to it).

Currently the savings rate is 10% and applies to up to £2,880 of savings income; from April 6, 2015 the rate of tax on up to £5,000 of savings income will be zero.

To explain how it works, I need you to imagine a cup of cappuccino. Savings income (interest and dividends for example) is the froth and it always floats to the top.

Non savings income (pensions, salary, and self employed income for example) is the coffee and always sits beneath the froth. The savings rate tax band also always sits directly on top of the personal allowance.

The personal allowance for 2015/16 will be £10,500. If your only income is £15,500 of pension in that year you will pay tax on £5,000 of it. If your only income is £15,500 of bank interest you will pay no tax at all, because you will be able to use the personal allowance and savings rate band. If however you have £15,500 of pension and £5,000 of bank interest the interest floats to the top, completely bypassing the savings rate – it is fully taxable, as is £5,000 of the pension.

Who said tax was straightforward?

Believe me, it’s even harder to explain with a collie sitting on your lap.

*Paul Aplin OBE is a tax partner with A C Mole & Sons and chairman of the Technical Committee of the Institute of Chartered Accountants in England & Wales Tax Faculty; you can follow him on Twitter @PaulAplinOnTax. He and fellow tax partners Amanda Gunter and Paul Kingdom can be contacted on 01823-624450.