Can i claim back tax on savings interest?

waterman3

Crikey, this is getting confusing:)

My ESA payments total nowhere near £6475 pa. Even if you add on my only other income (savings interest) it's still nowhere near.

D1zzy

lisyloo wrote: »

This is a bit complicated.

Normally once you have earned £6475 as taxable income in THIS tax year, then you are taxed at 20%.
Hhowever not all benefits are counted as taxable income (as jetta implies).

Turns out that ESA is sometimes taxable and sometime not and DLA is not taxable.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnBenefitsPensionsAndMaintenance/DG_10027059

So the question is.
Is your taxable income more than £6475.

I suspect you now fall below the threshold and can claim your tax back.
Hope that helps.

Thanks for putting me straight - my comment was based on a relative who receives incapacity benefit which is taxable

lisyloo

Great in which case you can claim it back and happily sign the declaration(s).

R85 may only help you going forward and not back, but you said you knew HOW to claim it anyway.

Mr.Mulla

waterman3 wrote: »

Hello all

I receive the middle rate care component of Disabiliity Living Allowance and also Employment and Support Allowance as i can't work due to ill health.

I just wondered if i would be able to claim back tax in these circumstances?

Thanks for any help

Since you cannot work due to your health, then YES, you can claim back the taxes on your savings. If you're on a low income or no income at all and have savings with a bank or you could be paying tax on your interest when you don't need to. If this is the case, you can register to have the interest paid tax-free. You can also claim a refund of any tax you've overpaid.

Careful_ly

I'm afraid its even more complicated there is still a level of 10% tax band for low earners.
So if you had taxable benefits or income of £6475 you could still get a tax rebate on savings income that had been taxed at 20% to make it 10%.

See example from HMRC site

http://www.hmrc.gov.uk/tdsi/example25.htm