Tax refund on savings query

steady__eddie

A couple of months ago one of my bonds was about to mature and I was asked if I wished to "have another go" or cash it in. I decided to withdraw the funds and I enclosed a completed R85 with my instructions. When I received the funds a few weeks later I noticed the interest had been paid net. I queried this and was told that they had not received my R85. I obviously replied that it was in the same envelope as my maturity instructions so if they hadn't received it they obviously hadn't received my instructions. If this was the case, how did they know which account to pay my matured funds to ? An investigation was promised, various reasons followed as to why I had paid tax, first they had found my R85 and it was being processed then it hadn't been found. Next I was told that I should have completed an R85 when I took my bond out (it was a 3 year bond) I replied that I was not eligible to receive gross interest at that time, it was only with the introduction of recent tax changes that I qualified. Finally they said that I was eligible but THEY could not refund the tax because the account was now closed, (could this be true ?), but they sent me a Statement of Deduction of Tax notice with instructions to forward this to HMRC. to claim a refund. I have not been through this procedure before and rang HMRC last week for guidance (when and where to send it). I was told that I needed an R40, which I have now received (rather daunting) and I should return it at the end of the tax year. It says do not send do not send tax certificates with it, I am confused, why was I given one with instructions to forward it if they say don't send it and why do I have to wait until fiscal end ? My income then will easily qualify me for a rebate. Apologies for the rant but I thought I needed guidance from the people who have used the system rather than those who administer it.
Anticipatory thanks.

xylophone

In this case, where you become eligible to receive gross interest during the life of a bond, you submit an R85 in that tax year and preferably in good time. You would then expect a letter from the financial institution acknowledging receipt and confirming that interest would be paid gross.

It would appear that you became eligible in 2015-16, did submit the R85 but because it was with maturity instructions (and assuming interest had not already been calculated and added), it was overlooked.

The financial institution is correct in saying that it cannot now refund the tax overpaid and that you must make a reclaim from HMRC.

http://www.taxvol.org.uk/about-tax/claim-back-tax-savings-income/