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    • JDR2018
    • By JDR2018 9th Aug 18, 1:20 AM
    • 1Posts
    • 0Thanks
    Tax Refund Process
    • #1
    • 9th Aug 18, 1:20 AM
    Tax Refund Process 9th Aug 18 at 1:20 AM
    I have some questions regarding HMRC and the process of tax refunds - I hope someone can offer some advice or share their experience.

    My situation is as follows:

    During the 2017/18 tax year I was taxed under PAYE with the 'standard' tax code 1150L. I left my job just over half way through the tax year and afterwards supported myself solely from savings (I had no further income from work or benefits). My taxable income prior to leaving work was around 18K.

    In June of this year I contacted HMRC with the above information to ask them whether I might be due a tax refund for 2017/18.

    In July I received a letter asking for details of any bank or building society interest received in the 2017/18 tax year. I totalled up the values from the dozen or so accounts I held during the year and replied with a summary of the interest in three categories: Non-ISA (742.54), ISA (1623.07), NSI RPI Index Linked Certificates (308.12). None of this was taxable as far as I am aware.

    I have now received a further letter asking for the sort codes and account numbers for the accounts.

    I'm wondering:

    1. Is it usual to be asked for sort codes and account numbers of bank / building society accounts when claiming a tax refund?

    2. Do banks and building societies no longer provide information regarding interest payments to HMRC (did that ceased with the introduction of the personal allowance for savings)?

    3. What will HMRC do with this information? Assuming they wish to verify the figures will the next letter I receive be one asking for statements for all my accounts; or will they contact the relevant institutions directly - discover I've given the correct information - and proceed with assessing my refund?

    4. Should I need to include ISA and NSI accounts in my reply as these are not taxed so have no impact on any tax refund? Or do they?

    5. Is there any way to submit this information online through my "Personal Tax Account"?

    Hope the above makes sense
Page 1
    • Dazed and confused
    • By Dazed and confused 9th Aug 18, 6:41 AM
    • 2,805 Posts
    • 1,353 Thanks
    Dazed and confused
    • #2
    • 9th Aug 18, 6:41 AM
    • #2
    • 9th Aug 18, 6:41 AM
    Non ISA interest is virtually always taxable, why do you think yours isn't?
    NB. The NSI RPI index linked certificates appear to be not taxable but you would have to check your paperwork to be certain.

    I wouldn't tell them about genuinely non taxable interest unless they specifically asked for it.

    1. Didn't used to be but maybe is required nowadays

    2. Yes, the rules banks need to follow are on and they have a deadline to do so (cannot remember what this is but presumably they get a while to collate it all and pass it on). Maybe you have applied before that information is available?
    Also, the so called "Personal Savings Allowance" has not changed whether interest is taxable or not, all interest previously taxable remains taxable post April 2016.

    3. I would guess they will then have sufficient information to calculate your tax position for 2017:18. If the data they eventually get from the banks differs then you might need a revised calculation.

    4. ISA no but NSI depends on the account, some are taxable and others aren't. Whatever you do make it crystal clear why you are omitting some information i.e. you originally reported ISA interest in error so the account info isn't relevant.

    5. May well be but I havent tried it myself.

    Based on your op there is probably 742 interest you will be taxed on but the tax rate will be 0%
    • Lorian
    • By Lorian 9th Aug 18, 6:45 AM
    • 4,461 Posts
    • 2,553 Thanks
    • #3
    • 9th Aug 18, 6:45 AM
    • #3
    • 9th Aug 18, 6:45 AM
    You have to tell them about the 742.54

    They will apply the personal savings allowance as appropriate.
    • Dazed and confused
    • By Dazed and confused 9th Aug 18, 6:56 AM
    • 2,805 Posts
    • 1,353 Thanks
    Dazed and confused
    • #4
    • 9th Aug 18, 6:56 AM
    • #4
    • 9th Aug 18, 6:56 AM
    Which is to tax it at 0%.

    The Personal Savings Allowance isn't applicable to lower earners so if the op remains out of work then it won't apply in 2018:19 and no tax is likely to be payable because of either the normal Personal Allowance or the savings starter rate of tax (also 0%). Both of which have to be utilised before the Personal Savings Allowance rate band can be used.
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