Claiming tax back on savings interest

opinions4u

oldfella wrote: »

if he hasnt got access to the bond interest then you could argue it all becomes liable at the end of the term

You could argue. But HMRC have a range of Finance Acts passed by Parliament on their side, so they would win the argument.

The tax liability falls at the point the interest is credited to the account.

It's not HMRC's problem if you've signed up to something that means you can't subsequently access the credited interest until the product matures.

SallySunshine

oldvicar, I never knew that:T
The majority of our bonds seem to commence/interest date due in December.
There was us waiting until the following April to claim tax back.

Rather gutted to know the taxman has had our interest earning them interest:(

Actually though, thinking about it, it is not just the bonds that are earning interest, there are other accounts and since the sums vary over the year, the interest is due throughout that year so it may be swings and roundabouts. Will definitely have to think about this method though.

Mikeyorks

SallySunshine wrote: »

but at least he has the choice.

He may not have with the SA form? If he's being sent paper copies - or receives a 'Notice to file' ....... he must complete the SA Return. Or there will be a penalty, which can no longer be wiped if there's no tax due. But he can ask to opt out if there's no longer a legitimate reason for filing - and reclaiming interest deducted at source isn't one.

By the way, the only income he has is his savings and he is under 65.

Also bear in mind that if his gross income exceeds his personal allowance (PA = £7475 this year) then any interest which hits the band formed by PA + £2560 (ie between £7475 and £10035) is only taxable at 10%.

Table and footnote right at the bottom of this page ;

http://www.hmrc.gov.uk/rates/it.htm

jennifernil

If the circumstances are changeable (as per your first post) then it is probably better to wait until the end of the year.

I also find that some banks do not send out the tax certificates till the end of the year, so if you need those it's easier to wait.

Mikeyorks

jennifernil wrote: »

I also find that some banks do not send out the tax certificates till the end of the year ....

I always found that with term deposits ('Bonds') some Banks never did issue them. Both with my own - and a couple of Probates - Halifax never issued them unless chased. And, as HMRC never bother, I never chased.

On the R40 ...... estimating the potential repayment, if you have any variability, is a recipe for grief.