HMRC owes me money from 2018-9 and 2019-20. Should I demand interest from them?

MarktheHarp

HMRC sent me a letter saying they owe me some historic tax credits (total approx £650) for the years ending 2019 and 2020. They've asked me to phone to confirm my bank details so they can repay this. Am I right in expecting they should pay interest on this?

I would like to speak to them but go armed to discuss if (and what) interest is payable by them. There are plenty of places to find out what HMRC charges for late payment, but where do I find interest rates on money owed by the HMRC?

EDIT: See last message for outcome of this, in case useful for anyone

sheramber

HMRC pay repayment supplement , if appropriate , on refunds. 

It is calculated automatically , by the computer, when the repayment is processed. 

El_Torro

A quick Google says that HMRC's interest rate is set at 1% below the Bank of England rate. This is what they pay, not the same as what they charge when you need to pay them.

When you ring them I think it's reasonable to ask if interest will be paid and how much. I wouldn't go demanding anything though, that probably won't end well. 

Dazed_and_C0nfused

El_Torro said:

A quick Google says that HMRC's interest rate is set at 1% below the Bank of England rate. This is what they pay, not the same as what they charge when you need to pay them.

When you ring them I think it's reasonable to ask if interest will be paid and how much. I wouldn't go demanding anything though, that probably won't end well. 

Although the list things on gov.uk HMRC pay (and charge) interest on doesn't seem to make any reference to tax credits.

Keep_pedalling

What number have they asked you to call? You need to make sure this is not some sort of a scam before you call them.

Dazed_and_C0nfused

Keep_pedalling said:

What number have they asked you to call? You need to make sure this is not some sort of a scam before you call them.

It could well be genuine, there was a thread about a similar thing on the Benefits board quite recently.

https://forums.moneysavingexpert.com/discussion/6649879/is-this-letter-a-scam

Grumpy_chap

MarktheHarp said:

I would like to speak to them but go armed to discuss if (and what) interest is payable by them. There are plenty of places to find out what HMRC charges for late payment, but where do I find interest rates on money owed by the HMRC?

Whenever HMRC have paid me a refund and that refund was eligible for interest, it has always been automatic and at a generous interest rate beating High Street deposit takers.  

I have no knowledge about whether Tax Credit repayments are eligible for interest.

MarktheHarp

Hi All,

Thanks for all the useful replies. Definitely an official letter. Will have the conversation with them and ask if interest is included in that amount, or what interest is applicable. Will do a quick calculation to see what it ought to be. Will update when I have had the conversation.

MarktheHarp

UPDATE for anyone interested:

Spoke to them just now, to confirm the account details. I asked about interest payable (having prepared myself by downloading BOE historic rates and done a quick spreadsheet for the average rate for each applicable year, subtracting 1% from that and then calculating the cumulative amount which might be due if interest were to apply).

Was told that as it's a benefit, they don't pay interest on late payments - but equally they don't charge interest either (for example, if you'd been overpaid by them and had to pay some back).

Thanks all! Was really useful to be prepared to discuss anyway. I'll leave this here just in case anyone else searches for this.

Apparently they have to manually check each payment has been correctly processed and banked so that may take another 2 months!!