Tax on Interest - unsolicited refund from HMRC

Dazed_and_C0nfused

Section62 said:

Noneforit999 said:

where_are_we said:

Your use of "provoke" and "unsolicited" are strange! 

That was my initial reaction, its as if HMRC are the nasties.
...

I read it as the OP being very sensibly wary that this might be another form of 'HMRC' scam.  An unsolicited invitation to 'log in' and claim your refund should provoke a sceptical response.  The "nasties" aren't the HMRC, but potentially people pretending to be them.

I've had to reclaim tax on interest using an R40 for about 10 years in a row now... not once has HMRC been proactive and told me I'd overpaid tax.  If I got a letter similar to the OP's OH I would be very cautious until I'd checked it out.

That is how HMRC have refunded tax (outside of Self Assessment) since 2016.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye91037

Refunding tax deducted from interest is almost certainly different to what has happened to the op.  The fact you are still having tax deducted 6 years after the principal changes to the TDSI scheme suggests you have either made a lot of PPI refund claims, receiving taxed interest as part of the payout, or have some savings/investment outside the norm.

Qyburn

Thanks everyone, I wasn't really too suspicious as it is very easy to check, just log into the main self assessment page without using the URL given in the letter.  But I was very surprised as neither of us has ever received a tax refund without having to work for it. On occasion HMRC have even resisted allowing me to submit a tax return, assuring me it was "not needed" and they were "sure there wouldn't have been an overpayment".

This was tax charged by HMRC on untaxed interest which they expected to be over the allowance, but was in fact below the allowance.  Collected last year through tax code and PAYE.

Refund was claimed this morning and hopefully will pop up in her bank account in a few days.

Dazed_and_C0nfused

Qyburn said:

Thanks everyone, I wasn't really too suspicious as it is very easy to check, just log into the main self assessment page without using the URL given in the letter.  But I was very surprised as neither of us has ever received a tax refund without having to work for it. On occasion HMRC have even resisted allowing me to submit a tax return, assuring me it was "not needed" and they were "sure there wouldn't have been an overpayment".

This was tax charged by HMRC on untaxed interest which they expected to be over the allowance, but was in fact below the allowance.  Collected last year through tax code and PAYE.

Refund was claimed this morning and hopefully will pop up in her bank account in a few days.

At some point she should also receive an updated tax code for the current year based on the actual interest received for 2021:22.

If the reverse happens and she ultimately owes tax for 2022:23 she'll get another P800 and the tax will be collected via her 2024:25 tax code.  Or alternatively she'll get a PA302 (Simple Assessment) and pay if direct to HMRC.

Albermarle

 On occasion HMRC have even resisted allowing me to submit a tax return, assuring me it was "not needed" 

Most people do not need to submit a tax return. However that does not mean that HMRC will not calculate whether you owe tax, or they owe tax to you.

Section62

Dazed_and_C0nfused said:

Section62 said:

Noneforit999 said:

where_are_we said:

Your use of "provoke" and "unsolicited" are strange! 

That was my initial reaction, its as if HMRC are the nasties.
...

I read it as the OP being very sensibly wary that this might be another form of 'HMRC' scam.  An unsolicited invitation to 'log in' and claim your refund should provoke a sceptical response.  The "nasties" aren't the HMRC, but potentially people pretending to be them.

I've had to reclaim tax on interest using an R40 for about 10 years in a row now... not once has HMRC been proactive and told me I'd overpaid tax.  If I got a letter similar to the OP's OH I would be very cautious until I'd checked it out.

That is how HMRC have refunded tax (outside of Self Assessment) since 2016.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye91037

Refunding tax deducted from interest is almost certainly different to what has happened to the op.  The fact you are still having tax deducted 6 years after the principal changes to the TDSI scheme suggests you have either made a lot of PPI refund claims, receiving taxed interest as part of the payout, or have some savings/investment outside the norm.

I wasn't suggesting my circumstances were the same, just that the idea "That's how tax works outside of Self Assessment" isn't universally correct, and some people may be receiving a letter like the OP's OH out of the blue for the first time.

quirkydeptless

I received my first ever Tax refund Today. Woo hoo!

where_are_we

quirkydeptless said:

I received my first ever Tax refund Today. Woo hoo!

How old are you! You must be a teenager! Seriously, congratulations. Myself and OH have had many over the years.

Chloe_G

I had one of these last year - claimed the tax back and then shortly after had another letter telling me I hadn't paid enough tax.  I have just received this year's refund letter - and I'm now waiting for the next letter to tell me I owe more!

ScarletBea

I had one too but it was wrong: they didn't include my interest from savings on the HL Active Savings, so I had to write about to them and I'm now waiting for the correct calculations, which is me owing £36 haha

I'm still waiting for their refund on my overpayment of an old year (the one time I trusted their calculations...), one offsets the other...

Anyway, you can check everything online on your Personal Tax Account, it's very useful!

Chloe_G

I need a list of the interest so I'm going to have to contact them.