Which tax is specifically deducted by banks before the customer receives interest on savings?

The correct answer is the Deposit Interest Retention Tax (DIRT). This tax is specifically designed to be deducted by banks directly from the interest earned on savings accounts before the interest is paid out to the customer. The purpose of this tax is to ensure that individuals pay tax on the interest they earn, as it is considered income. When a customer has savings in a bank account, the bank automatically withholds DIRT from the interest earned, meaning that the customer receives their interest payment net of tax. This system simplifies tax compliance for individuals, who do not have to take additional steps to declare this income to the revenue authorities.

Other tax options listed do not relate to the interest accrued from savings accounts. Capital Gains Tax applies to profits from the sale of assets, not interest income. The Universal Social Charge is a tax on income, but it is not specifically tied to interest payments on savings. Lastly, Value Added Tax is a consumption tax applied to goods and services, rather than a tax on interest income. These distinctions clarify why the Deposit Interest Retention Tax is the appropriate choice in this context.