R85 form to receive gross interest

kteara

Who is eligible for this? am I right in thinking it applies to those who have a tax allowance of £10,000 a year?

I currently have a part time job which fluctuates between 600-900 a month so some months I will have to pay tax but by April 2015, I will not have reached my full allowance for sure. Will I be able to receive gross interest by filling out an R85 form or am I not eligible?

iAMaLONDONER

kteara wrote: »

Who is eligible for this? am I right in thinking it applies to those who have a tax allowance of £10,000 a year?

I currently have a part time job which fluctuates between 600-900 a month so some months I will have to pay tax but by April 2015, I will not have reached my full allowance for sure. Will I be able to receive gross interest by filling out an R85 form or am I not eligible?

You'll be eligible as long as your taxable earnings are less than the tax free allowance in the 2014/15 tax year. Some benefits are taxable I think though....

kteara

iAMaLONDONER wrote: »

You'll be eligible as long as your taxable earnings are less than the tax free allowance in the 2014/15 tax year. Some benefits are taxable I think though....

but is it calculated based on the whole year? As I said I sometimes earn over 800 a month so I will be taxed that month, however I am pretty certain I won't exceed the tax limit for the year; £10,000.

For other people it might be difficult to guess if they will earn over £10,000 in one year or not so how do they make a judgement?

I really don't want to have any issues with HMRC over this tax issue in the future.

le_loup

Sorry, you have to take a punt.
Don't do it if there is danger of going over 10K and, of course, if you don't do the R85 and you do earn less than 10K you can always claim the tax back directly from HMRC

eskbanker

On the R85 form you're making a declaration about what you think is likely to happen and then committing to telling them if it pans out differently:

I declare that
• my income (or the saver’s income, if this form is completed on their behalf) is likely to be below my annual taxfree allowance and
• if it increases above my annual taxfree allowance I will tell the bank or building society straightaway

So, if you think you'll be under the threshold over the course of the full tax year, it's reasonable to go for it, as long as you correct if necessary if/when it becomes clear that you're over it.

bryanb

You have to include the interest you will receive in the calculation. The total of income and interest must be less than your tax free allowance.

thegreenmonkey

I'd recommend not using R85. Wait until end of tax year - if you exceed allowance, claim back the tax.

kteara

thegreenmonkey wrote: »

I'd recommend not using R85. Wait until end of tax year - if you exceed allowance, claim back the tax.

I will probably earn at most 6 Thousand from now until April 2015, even that is slightly pushing it. I think it will be safe to fill out an R85 don't you think?

eskbanker

kteara wrote: »

I will probably earn at most 6 Thousand from now until April 2015, even that is slightly pushing it. I think it will be safe to fill out an R85 don't you think?

You're probably already aware anyway, but just in case - it's earnings from 6 April 2014 to 5 April 2015 that count, so you need to include the last two months as well.

iAMaLONDONER

kteara wrote: »

but is it calculated based on the whole year? As I said I sometimes earn over 800 a month so I will be taxed that month, however I am pretty certain I won't exceed the tax limit for the year; £10,000.

For other people it might be difficult to guess if they will earn over £10,000 in one year or not so how do they make a judgement?

I really don't want to have any issues with HMRC over this tax issue in the future.

I say do sign a R85 if you reckon you'll have earnt say 8k between 4/14 and 4/15. If you total income over that period changes, just inform HMRC asap.

xylophone

See http://www.hmrc.gov.uk/taxon/worked-examples.htm for the current tax year and https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf for the tax year commencing 6 4 2015.

And in an old booklet HMRC used to produce (A Guide for People with Savings) it says, "Before you can register an account (for gross interest) you must expect the gross interest from all your accounts, plus any other taxable income you get, including pensions, to be fully covered by your tax allowance".

If you have overpaid tax you reclaim on R40.