Can I get back the tax paid on my savings?

talksalot81

Hi there,

I am currently a student getting a grant each month to maintain me. I do not have any form of paid work so dont get anywhere near my tax free allowance. I do however, have savings. The amount earned from my savings is nowhere near the tax free income allowance, yet I still end up paying tax on it. Is there any way around this (so I can get the tax back) or does the governement take tax on savings irrelevant of other income you may have?

Many thanks

Adam

jonesMUFCforever

You should request a certificate of interest for up to last 6 tax years.
Armed with these ask the Inland Revenue for the relevent claim form and you should get the tax that you have paid back.
In meantime ask for a form R85 wherever your savings are held and register it to get interest paid gross.

Milarky

You can also ask for a reversal of any recent tax deducted from interest payments when going to the bank/building soceity for the R85 form. It works for the current tax year [presume that the deducted amounts aren't settled up until after the tax year ends, so can be paid back to the accountholder during the year]. But for earlier years I assume this can't be done..

talksalot81

Thanks guys! It would be nice to get the last years tax back too, but I was paid (a small amount) so im guessing it will get complicated. The important thing is that the next year is covered.... actually i even wonder if Im not better just leaving my money in a high interest account (not having to pay tax) instead of putting into an ISA.... the rate would be higher wouldnt it?

Thanks

Adam

erb

You will probably get a higher interest rate on an ISA.

See HERE for some of the current best rates.

talksalot81

The ISA rate at best is about 5%? Compared the derbyshire savings account is giving 7 ish? So given no tax to pay, wouldnt that make the derbyshire savings account better than an ISA?

Adam

[Deleted User]

Yes - it would be better. But I think the account you're talking about will only allow you to deposit 250.00 per month. You cannot exceed this amount and if you already have a lump sum saved elsewhere, you cannot use this account.

isasmurf

Headline rates are all very well. But, as with most of the UK population, you are taking a short term view. You only get a limited ISA allowance per year. Putting the money in an ISA now, and in a few years time when you are a taxpayer you won't be paying tax on the interest.

Think longer term.

talksalot81

isasmurf wrote:

Headline rates are all very well. But, as with most of the UK population, you are taking a short term view. You only get a limited ISA allowance per year. Putting the money in an ISA now, and in a few years time when you are a taxpayer you won't be paying tax on the interest.

Think longer term.

Oh I am not thinking like that at all! Hopefully in a year I will be into full time employment, thus I will no longer be tax free.... The question is whether or not to put £3k straight into my ISA next april or whether I keep it in a savings account until the time when my non taxed status ceases (which would be long before the end of the 'ISA year')

Adam