Tax Rebate
TAX REFUND

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Tax Refund - Tax And Savings

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Tax And Savings

To find out about tax refunds on savings please follow the links below:

* Are you entitled to a tax refund on your savings?

* Can I get tax-free savings interest?

* How do I get interest without any tax taken off if I’m not a taxpayer?

* How do I claim tax back that has already been deducted?

* What should I do if my circumstances change?

Are you entitled to a tax refund on your savings?

If you have savings with a bank or building society and you are on a low income, you may be paying interest when you shouldn’t be. If this is the case you can register for any further interest to be paid tax free and you will also be entitled to a rebate on any tax already paid.

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Can I get tax-free savings interest

If your total taxable income is less than your tax-free Personal Allowance (and any Blind Person's Allowance if you receive this) then you will be entitled to tax free interest on your savings. This means you do not need to pay the 20 per cent tax that banks deduct from the interest they pay on most types of savings account.

It is not only those whose total taxable income is less than their tax-free Personal Allowance that can benefit from tax breaks on savings interest. If your taxable income is only slightly higher than your tax-free allowance(s) then you may be entitled to pay less tax on your savings interest. It may be the case that some or all of your savings interest may be taxable at only 10 per cent.

If this applies to you, as well as applying to reduce the amount of tax that is deducted from your savings interest in the future, you should be able to claim some tax back from that which has already been deducted.

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How do I get interest without any tax taken off if I’m not a taxpayer

You can register to get interest on your savings tax-free by filling in an R85 form which is entitled ‘Getting your interest without tax taken off’. This form is available from HMRC and it needs to be sent to your bank or building society once completed. Some banks and building societies will let you register by phone so it is worth checking whether this is the case for you.

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How do I claim tax back that has already been deducted?

You can claim tax back if you think you've paid too much on your interest you by filling in an R40 Tax Repayment Form. These forms are available from HMRC and a separate form will need to be filled in for each year you wish to claim for. In most cases you'll get back the tax you've overpaid as long as you claim on time. You can claim tax back on savings interest for up to five years ago.

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What should I do if my circumstances change?

If your income goes up or your tax allowances go down and your total taxable income is no longer lower than your tax free allowance(s) you will no longer be entitled to tax free interest on your savings. It is important to tell your bank or building society straight away about such changes so they can start taking tax off your interest. If you fail to do this you will receive a tax bill at the end of the year.

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TaxBanana.com is here to provide you with FREE independent tax information to help you save money and pay the right amount of tax. TaxBanana.com does not provide tax advice and the information provided is to help give people a better understanding and does not constitute tax advice.

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