10% Tax on Interest

capehorn

I think I might be able to claim some interest tax back for the last tax year. I paid 20% on it but I think most of it is covered by the 10% band. I am finding the guide on the direct.gov.uk website a bit confusing so I thought I would put my numbers up here and hopefully someone would be able to check them.

Taxable Pay 10/11 - £8213.79
Net Interest Received (Not inc. ISA) - £622.74 (Implies £778.42 Gross)

Tax Allowance £6475
10% Tax Band Allowance £2320

So total allowance is £8795, after pay I have £581.21 left to apply to my interest. So does that mean I could apply for a refund of £58.12?

Is that right?

Thanks

Editing to add: A small amount of the interest is made up of monthly Halifax £5 reward payments. Does this count as interest for this purpose?

agrinnall

Fill in a R40 form to reclaim tax on savings interest http://www.hmrc.gov.uk/incometax/tax-free-interest.htm#3

I can't answer about the Halifax payments I'm afraid.

jennifernil

Yes, each £5 has had £1.25 already deducted, so you can reclaim on your £5s too.

capehorn

Thanks, but I know about the form. I was wondering if my numbers were right.

Tax_guru

The 10% band for 2010/11 is £2,440 so you will actually have £702 available at the 10% rate, i.e. a repayment of £70.20. I am assuming that you have had tax of £347.60 deducted from your employment income and you should check this on your P60

capehorn

Thanks. The gov website still says £2,320 in their 10% band help pages! Tax was £346.80 for that year so very close to your estimate.