65+ bond statement

xylophone

anonymous person (expert ?) on the internet over that from an official source ?

I'm certainly anonymous but I'm no expert - but I did quote the guidance given by HMRC themselves in their notes and on the tax return.

frodob

moneyfoolish wrote: »

You may have a long wait as until my wife tells me exactly how much State Pension she received in the last tax year and how much interest she had on her current account I can't send off the R40 form! I don't think she actually wants to claim back the tax as she thinks she might then have to fill in a self-assessment tax form each year even though she is a non-taxpayer and she desperately wants to avoid having to do that. However, I'm absolutely sure that your MP is wrong and that you can reclaim this money.

I agree with concerns of your wife, and wonder if anyone can set our concerns at rest - whether an R40 claim by a non tax payer might lead to future self assessment requirement? Or indeed if there is any less complex way of reclaiming the tax than by completing this rather daunting form.

xylophone

I agree with concerns of your wife, and wonder if anyone can set our concerns at rest - whether an R40 claim by a non tax payer might lead to future self assessment requirement? Or indeed if there is any less complex way of reclaiming the tax than by completing this rather daunting form.

Overpaid tax on savings interest is reclaimed on R40.

https://www.gov.uk/apply-tax-free-interest-on-savings

https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-deducted-from-savings-and-investments-r40

Savings interest is now paid gross.

2010

If I remember correctly the rate of this 1 yr bond was 2.8% and anyone with the full amount of £10k would have paid £56 tax on it at 20%.

Filling in the laborious R40 will give HMRC all your latest financial details.

The new savings allowance of £1k came in last April, but before that, HMRC had already sent out tax codes to some people based on previous interest earned, sometimes from years ago when rates were a lot higher than now.
They just assumed they were still getting the same interest as you were from say 3/4 years ago.

Claiming £56 by filling in form R40 is a mini self assessment.

frodob

xylophone wrote: »

Overpaid tax on savings interest is reclaimed on R40.

https://www.gov.uk/apply-tax-free-interest-on-savings

https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-deducted-from-savings-and-investments-r40

Savings interest is now paid gross.

Cannot understand how your post is a reply to my query since I have already read most of information to which you are referring me. I am fully aware that interest is now gross - my queries refer to how to reclaim tax paid last year when this was not the case.

frodob

2010 wrote: »

Filling in the laborious R40 will give HMRC all your latest financial details.

Claiming £56 by filling in form R40 is a mini self assessment.

thanks for this which is exactly my point - is there no simple way of requesting this particular tax be reclaimed without carrying out a mini self assessment?


If not might this information being supplied lead to an annual request for same in future?


Like no doubt many who decided to invest in this I had assumed that being a NS&I product it would be tax free. I note it is from this year on, but still means that investors in a 3 year bond have been denied compounding of interest on the tax deducted in the first year, which certainly seems opposed to the spirit of the concept - irrespective of the small print.


I wonder if there was a lot of pressure on this point whether the treasury (now under new management) might be persuaded to do an about turn?

I am certainly loath to complete R40.

xylophone

my queries refer to how to reclaim tax paid last year when this was not the case.

And the standard answer is to complete and return the R40 as must have been obvious if you read the links before posting?

Otherwise you might do as McKneff did see post 33 here

https://forums.moneysavingexpert.com/discussion/5450062

but you would still need all the details requested on R40 to hand.



The point of mentioning that savings are now paid gross was to imply that an R40 will not be required next year( unless you find that you receive interest in excess of the tax free allowance but nevertheless can reclaim some tax).

As to whether making a tax reclaim (whether by phone or on a form) will lead to your having to self assess in the future - this seems unlikely but HMRC can make such a request at any time if they wish.

moneyfoolish

frodob wrote: »

I agree with concerns of your wife, and wonder if anyone can set our concerns at rest - whether an R40 claim by a non tax payer might lead to future self assessment requirement? Or indeed if there is any less complex way of reclaiming the tax than by completing this rather daunting form.

I don't believe it will lead to future self-assessment but with tax matters who can be sure! It's obvious even from this thread that some people in HMRC and some MPs don't even know the rules so I'm never confident of anything that might happen in the tax arena. It certainly bothers my wife as she still hasn't given me her exact tax and interest figures even though I know the only income she gets is a state pension (and not a full one at that as she was a full-time housewife for most of the time although we did pay some extra NI years to boost her pension). I also know she is getting a little interest on an inheritance from her parents but she'd rather give up the £136 in tax she could reclaim from the NS&I bonds for last year than have the threat of having to fill in a tax form every year!

xylophone

Like no doubt many who decided to invest in this I had assumed that being a NS&I product it would be tax free

Then you can't have read the prospectus ( or indeed the pages of comment on this very matter).



Example http://pensionsandsavings.com/pensions/756/

"Will the income be tax-free?

No the income from the bonds will be taxable, with basic rate tax of 20% deducted before the interest is paid to you. If you are a higher rate taxpayer, you will need to declare the interest you receive on your tax return. If you are a non-taxpayer you will need to claim back the tax that has been deducted. There are no ISA or other accounts that pay more than the 4% annual interest on the three-year bonds."

The interest on the bonds is now paid gross but that does not mean that it is not taxable.

xylophone

I also know she is getting a little interest on an inheritance from her parents but she'd rather give up the £136 in tax she could reclaim from the NS&I bonds for last year than have the threat of having to fill in a tax form every year!

Generous of her to do her bit towards reducing the National Debt!:)

Perhaps your wife would like to go the McKneff route ( see post above) - I seem to recall that she too has mentioned in the past that she does not receive a full state pension.