3.5% tax free

sneekymum

3.5% tax free - That's the equivalent of 4.4% or 5.8% for higher rate tax payers!

How? Simply pay too much tax and then claim it back up to six years later... I didn't know the IR paid intrest!

http://www.hmrc.gov.uk/rates/interest.htm

OK - I found this information on this thread - HERE - but thanks Harvey's Dad! This stuff belongs on Savings & Investments. Is it really tax free though?

Stonk

There's a long period on which interest is not due, judging from my experience. Example. If you overpay tax this year (Apr 2005 - 2006), I think they start paying interest from the deadline for tax return submission, i.e. 31 Jan 2007.

Certainly this year I claimed tax back in June 2005 for the year 2004/2005, and didn't get any interest on it when it came through last week. And in January 2003 I claimed a repayment for the year 2001/2002 which was repaid in February 2003 with a very small amount of interest which seemed to be for the period from 1 February 2003 to the payment date.

So you've got a long period where they are holding your money at 0% first. Even if you overpay a lump of tax right at the end of the tax year, it's gone for 10 months before you earn interest on it. You'd then have to leave it unclaimed with them a very long time to average out at a decent rate.