S874 Income Tax Act

comperinha

Included in this amount is compensatory interest of 8% a year simple interest which has been added to the amount due to reflect being deprived of these funds.

We have deducted income tax from the compensation element of the refund at the basic rate (20%) as obliged under section 874 of the Income Tax Act, this money is paid to HMRC. To find out more, please refer to the HMRC.GOV.UK website or ring their helpline on 0300 200 3300.

Got this today from unpaid interest from an old account. Anyone know if we can get the 20% tax back if we earned less than the personal allowance in the year the account was held? It'll be pennies I'm sure but HMRC wouldn't hesistate to chase us for similar pitiful amounts. They all add up.

Bigwheels1111

Call them. I would.

wmb194

comperinha said:

Included in this amount is compensatory interest of 8% a year simple interest which has been added to the amount due to reflect being deprived of these funds.

We have deducted income tax from the compensation element of the refund at the basic rate (20%) as obliged under section 874 of the Income Tax Act, this money is paid to HMRC. To find out more, please refer to the HMRC.GOV.UK website or ring their helpline on 0300 200 3300.

Got this today from unpaid interest from an old account. Anyone know if we can get the 20% tax back if we earned less than the personal allowance in the year the account was held? It'll be pennies I'm sure but HMRC wouldn't hesistate to chase us for similar pitiful amounts. They all add up.

Just as you could when 20% tax was deducted at source from interest payments made by bank and building society accounts I'm sure this will fall into the same bracket.

masonic

The good old R40 still exists if you don't file a tax return. There even appears to be a way to apply online here: https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-deducted-from-savings-and-investments-r40

Dazed_and_C0nfused

comperinha said:

Included in this amount is compensatory interest of 8% a year simple interest which has been added to the amount due to reflect being deprived of these funds.

We have deducted income tax from the compensation element of the refund at the basic rate (20%) as obliged under section 874 of the Income Tax Act, this money is paid to HMRC. To find out more, please refer to the HMRC.GOV.UK website or ring their helpline on 0300 200 3300.

Got this today from unpaid interest from an old account. Anyone know if we can get the 20% tax back if we earned less than the personal allowance in the year the account was held? It'll be pennies I'm sure but HMRC wouldn't hesistate to chase us for similar pitiful amounts. They all add up.

Any refund due would depend on your overall tax position.

The things that would point to a refund being due, in conjunction with any other taxable interest received are,

Unused Personal Allowance

Unused savings starter rate band (0% tax rate)

Unused savings nil rate band (0% tax rate)

As @masonic states the R40 is the relevant form if you don't complete Self Assessment returns.

It'll be pennies I'm sure but HMRC wouldn't hesistate to chase us for similar pitiful amounts.

If it really is pennies and you pay tax under PAYE then you will probably still owe HMRC rather than getting a refund. 

Funnily enough it tends to be amounts that HMRC don't chase you for which would stop you getting a refund of pennies.

EthicsGradient

I got this from Cynergy a few days ago, due to them not paying interest over the weekend during which I made a deposit. It was worth a grand 14p to me. There is a point at which FREE MONEY! really isn't worth it. Though that point varies from person to person: the only celebs who cashed a check sent to them for 13 cents were an arms dealer and Donald Trump. https://www.motherjones.com/politics/2020/08/trump-files-spy-magazine-prank/