Early withdrawal penalties & tax

Hopeful_saver

I wanted to withdraw the full amount from my AA 2 year fixed rate savings account and, as the penalty is 180 day's interest, I waited 180 days before writing to close the account. I was horrified to find it cost me 180 days interest PLUS 20% tax on the interest. I never received the interest as income, so I queried this with the AA, but they are adamant that the tax is due. It's not really clear to me from the terms and conditions.

Is the AA correct? Can I reclaim the tax in my Self Assessment?

Probably the answers are Yes to the first and No to the second

System

While you may find knowledgable people here (hopefully) you'd probably have more luck in the savings and investments forum:

http://forums.moneysavingexpert.com/forumdisplay.php?f=17

Good luck and hope you find a way around it!