Tuesday, 17 November 2009

TAX ON SAVINGS INTEREST - DOES THE TAXMAN OWE YOU MONEY?

Yes, there's £200 million up for grabs - and some of it could be yours! If you have savings and are not a tax payer (i.e. you earn less than £6,475 a year) or you are retired, you could be wrongly paying tax on your savings interest. In fact some pensioners can have a personal tax allowance of up to £9,640, depending on age and circumstances, and still be owed a tax refund.

This is why. If you open a savings account with a bank or a building society, the staff often forget to mention to you that you need to fill in a form (R85) if you are a non-tax payer, in order that the interest on your savings is not taxed, otherwise it is automatically taxed at source (before you get it). Perhaps when you originally opened your savings account you were a tax-payer, but due to unemployment or retirement, you are no longer, and you have forgotten to fill in the R85.

So if you, or someone you know, is in this situation, claim back now! The good news is that you can claim back 6 years' worth of wrongly paid tax by filling in form R40. So, January 2010 is the deadline for claiming back as far as the financial year 2003-2004.

It may not be much, and you may not get it in time for Christmas - but every little helps!

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