Lloyds Monthly Saver Tax Refund

drlabman

Hi,
I had no response to this post on the Savings forum, so let's try here ...
My wife's Lloyds Monthly Saver account has just matured and, as she'd mistakenly forgotten to register the account for gross interest, she was only paid net. We've just been into the branch to mention this. In the past when this has happened with a Club Lloyds account, we've been asked whether we're owed any tax, and they've been able to successfully request a refund. We were a month late registering the Club Lloyds account for gross interest, so it was only one month's tax. This time, I have a feeling that all the staff member did was mark the savings account for gross interest from now on (it's now converted to an Easy Saver account), because he mentioned that the tax would need to be reclaimed from the taxman. Can anyone advise if this is likely to be the case? And if so, why would it be different to our experience with the Club Lloyds account.
Thanks.

jonesMUFCforever

A bank cannot refund tax as the monies is not their to do so.
They are right to advise you to get a R40 (I THINK) which you can download from HMRC website.


Past experience - they might have given you £x from one of their own accounts instead of actually reclaiming the tax.

drlabman

I don't know anything about this but does it depend on when Lloyds submit the tax to HMRC? I don't imagine they do it in dribs and drabs, so if it hasn't been submitted yet, maybe they can refund it. I've definitely had tax refunded by Lloyds recently and other banks in the past, and I've never used an R40.

Vortigern

When I registered an R85 for gross interest, the building society refunded all tax paid since the start of the current tax year. I had to use an R40 to reclaim from HMRC the tax paid in previous years. This was an account which paid interest (and deducted tax) monthly.

If the OP's wife's account has just matured, all the interest will have been credited in the current tax year, and should be refunded in full by Lloyds.

Dobbibill

phone them, they can refund it if it is in the current tax year.

good luck

DB

Lloyds_Bank

drlabman wrote: »

Hi,
I had no response to this post on the Savings forum, so let's try here ...
My wife's Lloyds Monthly Saver account has just matured and, as she'd mistakenly forgotten to register the account for gross interest, she was only paid net. We've just been into the branch to mention this. In the past when this has happened with a Club Lloyds account, we've been asked whether we're owed any tax, and they've been able to successfully request a refund. We were a month late registering the Club Lloyds account for gross interest, so it was only one month's tax. This time, I have a feeling that all the staff member did was mark the savings account for gross interest from now on (it's now converted to an Easy Saver account), because he mentioned that the tax would need to be reclaimed from the taxman. Can anyone advise if this is likely to be the case? And if so, why would it be different to our experience with the Club Lloyds account.
Thanks.

Hi drlabman,

We can only backdate the registration to receive gross interest to the start of the current tax year. The backdated registration in this case will be during the previous tax year (as the account was opened during that). Due to that, your wife will need to contact HMRC for help with this.

Thanks,

Craig

drlabman

Thanks Craig. Not sure I understand the reasoning though, or maybe I'm not understading your response. Are you saying that because the monthly saver account was opened in the previous tax year, that even if I'd registered for gross interest, say, a week before it matured, the interest would have been paid net?

Lloyds_Bank

drlabman wrote: »

Thanks Craig. Not sure I understand the reasoning though, or maybe I'm not understading your response. Are you saying that because the monthly saver account was opened in the previous tax year, that even if I'd registered for gross interest, say, a week before it matured, the interest would have been paid net?

We submit the tax to HMRC once a year which is at the end of each tax year, therefore we can only backdate interest earned during the current tax year.

If you registered for gross interest before the 12 month anniversary of the Monthly Saver, then we could backdate the interest earned on the account during the current tax year as gross. Any interest earned during the last tax year (i.e. from when the Monthly Saver was opened until the end of the last tax year), however, will still be at the net rate and that needs to be dealt with through HMRC.

You can find some info and useful links on this government site.

I hope this helps,

Craig

drlabman

Aha. I guess the crux of the matter is - do you mean "earned" or "credited". I could see that if the interest was credited monthly, then you wouldn't be able to refund tax paid in the previous tax year, but if you really mean "earned" then I don't understand. It's the same with personal taxation of interest. When an individual reports interest to HMRC, it doesn't matter when the interest is earned - the only thing that matters is when interest is credited to the account.

colsten

What's the issue with filling in an R40? Looks a simple enough form to me that can be filled in and posted in less than 10 minutes.

Lloyds_Bank

drlabman wrote: »

Aha. I guess the crux of the matter is - do you mean "earned" or "credited". I could see that if the interest was credited monthly, then you wouldn't be able to refund tax paid in the previous tax year, but if you really mean "earned" then I don't understand. It's the same with personal taxation of interest. When an individual reports interest to HMRC, it doesn't matter when the interest is earned - the only thing that matters is when interest is credited to the account.

In this instance, we would have calculated interest on the balance of the Monthly Saver each month and then paid the appropriate amount of tax to HMRC at the end of the last tax year. This would have happened even though the interest wasn't credited to the Monthly Saver until the 12 month anniversary during this current tax year. As we have already paid the tax for interest earned on the account during the last tax year to HMRC, we can't refund that tax. Where it's appropriate, we can only refund from the current tax year as we've not yet made that tax payment to HMRC.

In order to backdate the registration for gross interest on the account to the account opening date, your wife will need to get in touch with HMRC.

I hope this helps,

Craig