tax on interest

corbett1

Hi,

Could someone please be able to help with the following,
My wife has just had her final payslip for this year and has earned £1950. (no tax paid on this sum) Has also received £4200. in money from savings accounts (no isa)
All the interest has been taxed at 20%. I understand she can claim some of this tax back, the thing is I understand that tax on savings is only 10%, any clue how much she will be able to claim.

Many thanks

alastair_h

Have a look here on HMRC site, this may help. She may be able to claim 10% back if on lower tax band.

http://www.hmrc.gov.uk/incometax/tax-free-interest.htm

Looks like completing form R40 may be needed.

http://search2.hmrc.gov.uk/kbroker/hmrc/forms/viewform.jsp?formId=818

Perhaps you should consider saving in a Cash ISA, as any interest earned would be completely tax free. Please find attached best ISA buys.
http://forums.moneysavingexpert.com/showthread.html?t=401374

CLAPTON

if 1950 is her gross earning
and 4200 is her interest after tax (at 20%)
then her total taxable income is 4,200/.8 = 5250 + 1950= 7,200
the first 6035 is tax free so that leaves 1165 to be taxed at 10% (= 165)

so as she has already paid 1,050 in tax she is due a tax refund of £933

Mikeyorks

CLAPTON wrote: »

so that leaves 1165 to be taxed at 10% (=165)

I think £1165 to be taxed at 10% (= £117) ...... was intended? As that then leaves the overpayment of £933.

You've obviously not re-calibrated the calculator to BST?