Tax refund question

Princess_Coupon

I've just received a letter from HMRC saying in 2008-2009 I paid £35 too much tax but there is no check included and no mention of how I will get it back. They have "helpfully" included a booklet which tells me how to pay them when an underpayment has occurred but nothing on an overpayment.

What happens next?

angela_itr

I received the same thing this morning, saying I had overpaid and not underpaid thank goodness.

I called HMRC to ask and they said a cheque should follow in the next 7 days, otherwise to call and chase it.

I've been reading about claiming interest back on PAYE refunds, as there was a case called Sempra which established this as a rule (I think). When I asked the lady on HMRC helpdesk, she very obviously clammed up and pretended to know nothing about it, even when I referred to advice on the Adviceguide org website under Tax Refunds (can't post link as newbie) - which seems to say interest can be claimed and refers to the HMRC website for the rates. Her behaviour was quite strange. All she could do was advise me to write a letter if I believed interest could be claimed - surely HMRC should have a policy on this?!

Does anyone else know whether it is possible to claim back interest and if so, how to calculate it?

System

I believe that interest will have been included in the refund if it is due.
But...

This link shows how interest should be applied to repayments:
http://www.hmrc.gov.uk/rates/interest-repayments.htm

Princess_Coupon

angela_itr wrote: »

I received the same thing this morning, saying I had overpaid and not underpaid thank goodness.

I called HMRC to ask and they said a cheque should follow in the next 7 days, otherwise to call and chase it.

I've been reading about claiming interest back on PAYE refunds, as there was a case called Sempra which established this as a rule (I think). When I asked the lady on HMRC helpdesk, she very obviously clammed up and pretended to know nothing about it, even when I referred to advice on the Adviceguide org website under Tax Refunds (can't post link as newbie) - which seems to say interest can be claimed and refers to the HMRC website for the rates. Her behaviour was quite strange. All she could do was advise me to write a letter if I believed interest could be claimed - surely HMRC should have a policy on this?!

Does anyone else know whether it is possible to claim back interest and if so, how to calculate it?

Thanks I'll wait 7 days - what idiots not putting the cheque in the letter they are wasting postage, paper, also man power with the call you had to make.
Mine included under £1 of interest

angela_itr

Ahh I can see now that the interest is included under Repayment Supplement... £4.83!!! You can bet your bottom dollar that if I had owed this amount to HMRC since 2008-09, I'd be paying more interest on it than that!

System

angela_itr wrote: »

Ahh I can see now that the interest is included under Repayment Supplement... £4.83!!! You can bet your bottom dollar that if I had owed this amount to HMRC since 2008-09, I'd be paying more interest on it than that!

You are absolutely correct, on the latest info, 3% on stuff we owe - 0.5% on stuff HMRC owe - Go figure

angela_itr

You don't think thats challenge-able then? I think its rather suspicious that they use the term Repayment Supplement rather than 'interest due'. Also what about the Sempra judgement, which I thought clarified that compound interest would apply etc? I picked this up from reading a similar thread on consumer action group so haven't fully researched myself, perhaps I should...

System

angela_itr wrote: »

I've been reading about claiming interest back on PAYE refunds, as there was a case called Sempra which established this as a rule (I think). When I asked the lady on HMRC helpdesk, she very obviously clammed up and pretended to know nothing about it, even when I referred to advice on the Adviceguide org website under Tax Refunds (can't post link as newbie) - which seems to say interest can be claimed and refers to the HMRC website for the rates. Her behaviour was quite strange. All she could do was advise me to write a letter if I believed interest could be claimed - surely HMRC should have a policy on it

Why on earth do you expect someone who is one step up from the bottom of the ladder in HMRC to know the finer points of a case called Sempra or a website called Adviceguide.org? It wouldn't have been a case of her clamming up and pretending to know nothing she wouldn't have known anything about them and would not be expected to know anything about them or HMRC policy on a salary of £17 - £19K per year. She is not a Tax Inspector. She very rightly advised you to put your query in writing so that it could be passed on to someone with more technical knowledge and information on HMRC policy who would be paid considerably more than her.

angela_itr

Calm down!

I never said I expected her to know about Sempra or whats on the Citizens Advice website. I just asked her what the position was regarding claiming interest on a tax rebate, ie is it allowable or not. Bearing in mind the number I called was the number on the letter to call with any queries, I would have expected the person answering the phone to know HMRC policy on this.

My point was that she seemed unwilling to say anything on the subject whatsoever which I found odd. Obviously if additional interest could be claimed on the tax over-payment, HMRC would not want to shout about it and I suspected she may just have been complying with this.

Mikeyorks

angela_itr wrote: »

Also what about the Sempra judgement, which I thought clarified that compound interest would apply etc? I picked this up from reading a similar thread on consumer action group so haven't fully researched myself, perhaps I should...

You shouldn't just 'pick things up' ....... never know where they've been. Had you taken the trouble to research you would have found it to be chalk and cheese to what you're discussing. The Sempra case revolved around tax paid early under the Advance Corporation Tax rules. When that (or part of it) became repayable - Sempra argued they were entitled to compound interest. The Judge eventually agreed with them but solely for the 'period of prematurity' ...... ie the period it had been paid 'in advance'.

There is no read across to PAYE which is paid concurrently with earnings. Where repayment is due then interest is added automatically where the repayment is made after 31st Jan following the tax year. But it's termed a repayment supplement - because that is how it is described in the legislation (Income Tax (Earnings and Pensions) Act 2003). It's not negotiable ..... unless HMRC make a mess of it ....... as it's set out in legislation.

Ahh I can see now that the interest is included under Repayment Supplement... £4.83!!! You can bet your bottom dollar that if I had owed this amount to HMRC since 2008-09, I'd be paying more interest on it than that!

Over the years there have been a number of proposals for 'mirror interest' - where HMRC etc would charge / pay the same rate. All rejected by successive Govts via Treasury. After all - do you expect to get money out of your Bank at the same rate they offer for deposits?

Mikeyorks

Princess_Coupon wrote: »

- what idiots not putting the cheque in the letter they are wasting postage, paper

Security and practicality. The printer that prints cheques is housed more securely than the general laser printers / output handling equipment. So merging the print streams isn't a practical proposition as it's high cost.

As this is a new PAYE system - I suspect they're working instead to link with the SA system which issues most repayments via BACS. The main issue with PAYE is that there's a much greater customer base - and (with no Return to make) a greater difficulty obtaining customer Bank account details.