Money
Paul Lewis on the web
Getting your own back - claim what's yours
Psst. Would you like £200? That's what Her Majesty's Revenue & Customs estimates is owed to millions of pensioners who have savings. Although they have money in the bank their income is too low to pay tax. But banks and building societies deduct tax automatically from the interest they pay on savings. Don't blame them — it's the law! Altogether the Revenue has around £250 million of our money deducted from interest payments that it should never have had in the first place. It's time to get your own money back, says Paul Lewis
Can I get my own money back?
You can claim back the tax wrongly deducted for the past six tax years. So in 2009/10 you can go back to 2003/04. Anything wrongly deducted before that is lost forever. Sorry! And you can only get 2003/04 money if you put your claim in before January 31 2010.
If your income is less you're your personal allowance then you should not have paid any tax and you can claim back all the tax charged on your savings interest in that year. Find your personal allowance from the table below. If it is less, get your own money back!
My income is a bit above those levels. Can I get anything back?
If your income is above your personal allowance in any of those years all is not lost! If it is within about 2000 of your personal allowance you be able to get some money back. That is because your interest has been taxed at 20% or more. But you will only be due to pay tax at 10%. The rules are slightly more complicated this year and last but it is a good rule of thumb.
How do I get my own money back?
You have to get the claim form – one for each year. It is called R40 and you need one for each tax year you are claiming money back. Write the tax year at the top of each form. You can go online and print them off here www.hmrc.gov.uk/forms/r40.pdf. There are helpful notes here www.hmrc.gov.uk/forms/r40notes.pdf. Send the form back to Leicester & Northants (Claims), Saxon House, 1 Causeway Lane, LEICESTER LE1 4AA. For help call 0845 366 7850.
Step 2: stop it happening in the future
If your income is too low to pay tax then you can register to have your interest paid without tax being deducted in future. Fill in form R85 which you can get from your bank or building society or download here www.hmrc.gov.uk/forms/r85.pdf. Give the form to your bank or building society. For help call 0845 980 0645.
Well done. You have got your own money back!
More information: www.hmrc.gov.uk/taxback
and www.hmrc.gov.uk/tdsi/claim-tax-back.htm
Written by Paul Lewis, May 2009. Paul is the editor of Saga Magazine's Money News section. Paul's opinions are his own and for general information only. Always seek independent financial advice.
