Tax Rebate...

bedazzled

Hi,
I've posted this in another section am not sure either are the right one...anyway, i've been in contact with the inland revenue about a rebate and keep getting different information from them.

On a rebate do the inland revenue pay the recipient compound tax on the ammount that was overpaid? I've been told different stories from different people in my local office and thought I met get a more helpful answer here.

Thanks in advance!

amersall

not sure on this, when i got my tax rebate i only got the amount i overpaid back

fengirl_2

HMRC only pays interest on tax overpaid from tax years prior to the last complete tax year.

PeteMc

HMRC call it Repayment Supplement, it's not interest in the sense of that received on a bank account. I don't think it is compounded though www.hmrc.gov.uk will tell you the ins and outs.

I recently received a cheque for nearly £18k from tax years 04/05 and 05/06 and it's difficult to tell exactly how they calculated the RS but it seems to be at the published rate for each month on the amount owed from that tax year from the following February.

For example RS became applicable on 01/02/2006 for the amount owed from tax year 04/05 (you have up to 31/01/06 to submit a return). This was then paid at the published rate up to April 09 when I received the cheque.

bedazzled

Thanks very much for the replies! in the space of a day i've found out more than my local tax office seemed to know.

Just thought (after reading an article) though, with hmrc's tax rate at 0% for overpayments, if I am owed from 05/06, 06/07 and 08/09 will they pay interest on the first two or not as the tax rate is low?.

I'm having a very blonde day!

suso

They should pay you at the interest rate that was applicable on that day.

There will be no interest repaid for the tax year 08/09 unless its repaid after the end of Jan 2010.

So for repayment supplements for earlier years, you could have 3 or 4 different rates of interest being applied to the account.