R85

Dazedandconfused

Can anyone help me with this.

I'm not the most vigilant person at going through my bank statements so I've never noticed before, but I got my annual statement of interest for the year on my bank account and found I wasn't being charged tax on my interest on one particular account. I think I should be. I'm not a tax dodger so I popped into the bank to find out what was going on. They said yes I hadn't been taxed contact the Inland Revenue. Inland Revenue took some details and confirmed I should have paid tax but said the bank should deal with it.

The bank say they can't change it on my current account but the Inland Revenue say they can't either. Each is saying the other deals with it. The bank sent me an R85 and told me to fill that in but that says on it that it is for "getting your interest without tax taken off" and there isn't anythng to fill in to say that you actually want to pay tax. The R85 says "If your income goes up, above your annual tax - free allowance, you must tell your bank..." but I've tried that but they say contact the Inland Revenue.

I've called the bank 4 times and been in twice now and phoned the Inland Revenue twice and it's still going on. Can someone advise me who sorts this out. I just want to get it sorted so that it is resolved and I don't have the same problem next year.


Has anyone else had this problem?

Mikeyorks

So - do the Bank have an R85 filed on your current account? If not - then they must deduct tax at 20% from any interest paid. If they haven't deducted tax (and have no R85 and we're talking from 6.4.10) then they should resolve it as, being 'deposit takers' they're bound by the TDSI (Tax Deduction Scheme for Interest) rules patrolled by HMRC.

If the non-deduction goes back beyond April - then only HMRC can deal with it. If it's a meaningful sum ...... then simply write to HMRC. If the gross interest is a small sum - simply not worth the overall admin? Just ensure the Bank get it right from now on.

ERICS_MUM

The bank needs to amend your account from the beginning of this tax year so you will pay tax from that date. At the same time HMRC should calculate the tax owed for previous tax years.

Personally I would write to both, telling them the situation and what you need them to do, copy the bank letter to the HMRC and vice versa and send registered. At least you will be covered if it gets nasty for any reason (hopefully it won't, no reason to but I'm overly cautious and always cover myself like this in matters financial).

Good luck.


Linda

Dazedandconfused

Mikeyorks wrote: »

So - do the Bank have an R85 filed on your current account? If not - then they must deduct tax at 20% from any interest paid. If they haven't deducted tax (and have no R85 and we're talking from 6.4.10) then they should resolve it as, being 'deposit takers' they're bound by the TDSI (Tax Deduction Scheme for Interest) rules patrolled by HMRC.

If the non-deduction goes back beyond April - then only HMRC can deal with it. If it's a meaningful sum ...... then simply write to HMRC. If the gross interest is a small sum - simply not worth the overall admin? Just ensure the Bank get it right from now on.

Well they are saying I must have filled in an R85 at some point. I certainly haven't filled one in since I was a student which was some time ago and I definitely notified them when I stopped being a student.

The interest before this year would have been so small that to be honest I've never really looked at it (like about £2.50 for the year or something). This year it is quite a lot more as I had moved some money into that account so I've noticed.

Inland Revenue told me they could deal with a back payment either through my salary or I could just pay them but that the bank need to sort out the issue otherwise it will be the same next year. They said pretty much what you are saying that if it looked to be an issue just this financial year, make a payment for the year and then if it turned out there was more to pay I could pay that later when it's sorted. They also said they would note their system that I was trying to sort it out, and when I rang up since the person I spoke to knew about this so at least they must be recording it somewhere.

The bank are being useless and saying they can't do anything about it at all. That the Inland Revenue fill in the rates and thats it and they just keep asking me to fill in an R85. I don't want to fill in an R85 as surely that is going to make it worse I don't want to receive gross tax!!

I will do what you say and send a recorded delivery letter to both and see if that does anything. I'm getting really annoyed about this. I must have been on the phone over an hour in total about this now and I've been to the branch twice. It's such a waste of time because people don't know their jobs.

CLAPTON

Dazedandconfused wrote: »

Well they are saying I must have filled in an R85 at some point. I certainly haven't filled one in since I was a student which was some time ago and I definitely notified them when I stopped being a student.

The interest before this year would have been so small that to be honest I've never really looked at it (like about £2.50 for the year or something). This year it is quite a lot more as I had moved some money into that account so I've noticed.

Inland Revenue told me they could deal with a back payment either through my salary or I could just pay them but that the bank need to sort out the issue otherwise it will be the same next year. They said pretty much what you are saying that if it looked to be an issue just this financial year, make a payment for the year and then if it turned out there was more to pay I could pay that later when it's sorted. They also said they would note their system that I was trying to sort it out, and when I rang up since the person I spoke to knew about this so at least they must be recording it somewhere.

The bank are being useless and saying they can't do anything about it at all. That the Inland Revenue fill in the rates and thats it and they just keep asking me to fill in an R85. I don't want to fill in an R85 as surely that is going to make it worse I don't want to receive gross tax!!

I will do what you say and send a recorded delivery letter to both and see if that does anything. I'm getting really annoyed about this. I must have been on the phone over an hour in total about this now and I've been to the branch twice. It's such a waste of time because people don't know their jobs.

being student has little to do with tax.. you are taxed just the same as a student as anyone else

however, as a student you probably didn't earn enough to pay tax so you could sign a R85 to get your interest gross.

You should have told the bank when you started being a taxpayer and just told them that you now needed to be taxed as a taxpayer... telling them you were no longer a student isn't the same thing.

All you need to tell the bank is that you now pay tax and to remove the tax free status of your account (and you need to do this for each account even if they are with the same bank

which bank is in anyway?

Mikeyorks

Dazedandconfused wrote: »

I will do what you say and send a recorded delivery letter to both and see if that does anything.

No, I didn't say that ...... and you don't send special delivery letters to HMRC. It's a waste of their time and a waste of your time and money.

Forget about the previous years .... the cost of the admin to resolve it far exceeds the yield. Just write to the Bank at their complaints section. Point out they are paying the interest gross on your current account - you are not entitled to gross interest - and that attempts to resolve it have failed. That any R85 they hold should be countermanded and they should advise that has been done and if they will apply that retrospectively back to 6th April 2010?

If they respond that they can't do it retrospectively (for instance Halifax can - LLoyds appear not to be able to. All down to systems not lack of will) ...... up to you to declare the gross interest paid, for the first few months of the year, to HMRC at some point later on this year. And they will code out any underpayment.

As Clapton correctly says - telling them you were no longer a student isn't the same as revoking any R85 you had filed.