Pensioners could be in line for tax windfall, says HMRC
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Pensioners who have overpaid tax on their interest from savings could be eligible for a tax windfall, says HMRC
HMRC has launched a campaign called TaxBack, which aims to encourage pensioners who have overpaid tax on interest from savings to claim it back, and register for savings interest to be paid gross in future, if they are non-taxpayers.
Banks and building societies are required by law to deduct 20 per cent tax from the interest on everyone’s savings before it is paid.
But pensioners – and other savers – who are non-taxpayers, or who qualify for the 10 per cent savings rate, will be due a repayment if their savings have been taxed at 20 per cent.
HMRC says it is simple to claim back this tax and can be done using HMRC Form R40.
In addition to claiming any overpaid tax back, non-taxpayers can also get future savings interest paid gross, without deduction of tax, by filling out the R85 form and sending it to their bank or building society.
Exchequer secretary to the Treasury Sarah McCarthy-Fry says: “We know times are tough for many pensioners, and we do not want anyone paying tax they do not need to.
“If you think you might have been overpaying tax on your savings, check the figures, and make a claim if you’re eligible.
“If it does not affect you, but you know someone it might – spread the word.”
As part of the campaign, HMRC is writing to around 3.4 million pension credit recipients, asking them to check if they have overpaid tax on their bank or building society interest.
The letter will be accompanied by a helpsheet, which pensioners can use to help them calculate their annual income and allowances and whether they may be due some money back.
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