Tax Overpayment reclaim question

Colin_London

I have been assisting a friend with his tax affairs. It turns out over the past six years, since becoming a higher rate tax payer, he has not been reclaiming higher rate marginal relief on his Personal Pension, which only recouped tax at basic rate. This tax overpayment could amount to over £1000. He is of course PAYE - self assessment would probably have highlighted this issue ages ago.

Obviously there is a large incentive to reclaim this money. However he is concerned that given the size of the reclaim, which would probably be looked at in some detail, it would also be prudent to advise some small amounts of interest on non-ISA savings accounts which should also have been declared due to him being a higher rate tax payer. The underpayments due would be much less than the overpayment reclaim (probably no more than £200 in total), but he is concerned that he would be fined in some way for not declaring them at the time.

Would fines be applied for these small amounts of underpayment? Would he get a 'black mark' for forgetting to declare at the time? As he is PAYE do the fines payable under self assessment apply?!

ceeforcat

I very much doubt it - from what you say, there was no requirement at any stage to file a return and never any additional liability to pay.