R85 Help

2010

A relative of mine has a tax allowance for the current year of £9440.
Her state pension plus her company pension comes to £9014 which takes her out of paying income tax.
She has a couple of savings accounts which she pays tax on.
Looking at the R85 help sheet it says to add all your gross savings interest together.
If she does this, it will take her over the £9440 allowance but if she only adds ONE gross interest from one bank she still stays under.
Is she allowed to just fill in the R85 for just one building society, keeping her under the tax threshold and continue to pay tax on her savings with the other building society?

Dazed_and_confused

No. In this situation tax has to be paid and anything overpaid claimed back.

Even following your suggestion a claim may still have to be made as it sounds as though your relative could be one of the few people left who pay 10% tax.

John_Pierpoint

How old is the relative ?
There is still a small age allowance out there, claimable in the years she becomes 65/75:

Per year

2012-13
2013-14

Personal allowance (age under 65)

£8,105
£9,440

Personal allowance (age 65-75)

£10,500
£10,500

Personal allowance (age 75 and over)

£10,660
£10,660

antonic

This is correct.

If your income exceeds your tax allowance then interest has to be paid net and an R40/SA return completed each year to reclaim any tax deducted from savings, in excess of what needed to be paid.

Each year all Financial Institutions make an annual return to HMRC of all accounts registered for gross interest.
HMRC then match this information with the data they hold to check that no taxpayers have accidentally registered for gross interest.

This information is then passed to the Shares & Savings team in HMRC, who then deal with any transgressors.

If you are found to have registered incorrectly HMRC can instruct the relevant institution to cancel the R85 and the account CANNOT be registered again without HMRC cancelling the deregistration notice.

HMRC can also ask for any underpaid tax to be paid.

(I know this as this used to be my job !).

Dazed_and_confused wrote: »

No. In this situation tax has to be paid and anything overpaid claimed back.

Even following your suggestion a claim may still have to be made as it sounds as though your relative could be one of the few people left who pay 10% tax.