interest gross or net

trashcan_2

Hi
I had this as part of another question i posted but I thought I would post it on it own.

I have been I'll for 4 years after a stroke. now I am unemployed living on my savings.

I am now job hunting which is more difficult with my heath problems so i am unsure when I will get a job , maybe tomorrow maybe next year.

Should i claim for gross interest on my savings, most is in isa's with about £7,000 in ordinary savings account.

I also have a wife who is in work.

Now is it worth me claiming gross interest on my savings of £7-8,000 when i could be or not in work soon.
The money is in joint accounts and my wife is working so this has to be taken in account.

any advise would be helpful.

thanks.

martinman3

trashcan wrote: »

Now is it worth me claiming gross interest on my savings of £7-8,000 when i could be or not in work soon.

The R85 only affects interest paid after it is submitted so, unless your interest is being paid monthly, the decision to submit or not only needs to be made shortly before annual interest is paid.
You can fill in a R40 form http://www.hmrc.gov.uk/forms/r40.pdf to reclaim previously paid interest. (note shared interest divided 50:50 so can reclaim half)
You can also fill in a Self Assessment form for the tax year in which you start work to reclaim tax on interest. There is a new 10% rate for savings interest which may apply if income is low.

trashcan wrote: »

The money is in joint accounts and my wife is working so this has to be taken in account.

If you submit a R85 for a joint account then your half of the interest will be paid gross and the other half net.

What you do depends on whether you have received benefits, whether you are over 65, what your income/savings income will be when you start work.

Visit the www.hmrc.gov.uk site and look at the Self Assessment form and Help guide which allows you to calculate your tax. http://www.hmrc.gov.uk/sa/forms/net-07-08.htm

Mikeyorks

You don't say if your wife is a taxpayer. If she is it may be worth while putting all the savings in your name to maximise the tax benefits (whether or not you fill in an R85 [unable to advise on that as it depends on proximity to a job and - previous post - when the interest is paid]).

But a lot of Banks will not accept an R85 for one of the parties in a joint account. As their software will not cope with it. So in such a case either both of you have to complete an R85 (if applicable) - or neither. In the latter case you have no choice but to claim a refund for the tax deducted on your 50% of the Interest after the year end.

trashcan_2

Interesting advise thank you.

yes my wife is in employment and a tax payer.

How many months can you claim back payment of tax?

Only saying that because i have a appeal with the dhss and if i win i probably would not get gross tax but if i lose i will want to claim my tax back.

As i have not been getting any money at all for the last 4 months, i should have been getting gross . My appeal is in 1 months time.

Thanks for your helpful advise.

Mikeyorks

Not sure I've entirely followed that. So apologies if 'grandmas' and 'eggs' comes into the following.

The net or gross (filing an R85) applies solely to the current tax year. But if you determine to file an R85 .... some Banks will retrospectively apply that to any Interest applied since 6th Apr 2008. There was a list I once found on HMRC of all the Banks that do that (eg Halifax does) .. but never been able to find it since! So you can but check your Banks T&Cs - or ask them. If your Bank doesn't ... you can claim back for anything paid gross in 08-09 (and the previous 5 years) - but only after 5th Apr 2009. And you do that from HMRC.

Worth mentioning not all Banks accept paper R85s. Again Halifax is one of them - you just 'phone them - tell them the accounts involved and they write to you, in R85 terms, telling you what you've signed up to.

regularsaver1

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