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How do I claim back tax on savings income?

Prior to the tax year 2016/17  income from savings, for example, bank or building society interest, was normally received net of tax. This meant that the bank or building society, or other savings provider, had taken tax off before you got it. This deduction of income tax was normally at the basic rate of 20%. From April 2016 this is no longer the case and you will receive the interest gross (without tax being taken off), the responsibility then falls to you to tell HMRC if you owe any tax. Read the section on 'What tax allowances apply to me?'.

For tax years 2015/16 and earlier, if you are on a low income, you may be able to get back some or all of the tax you have paid on your interest.

We explain how to claim a refund of tax paid on savings income in this section. This section is for people who are not within self assessment, that is, people who do not have to fill in a tax return.

How do I claim back overpaid tax on savings income?

Prior to 2016/17, tax was automatically taken off the interest on UK savings at the rate of 20%. You may need to claim a repayment of tax, if any of your savings income should only have been subject to the 0% starting rate of tax for savings or should not have been taxed at all.

To claim back overpaid tax on savings income you need to fill in a form R40.

If you have already filled in a form R40 in earlier years, you should receive one automatically each tax year. The form will show the HMRC office address to which you need to send in the completed R40.

If you have not filled in a form R40 before then you can get the form online or request a copy by telephoning HMRC 0300 200 3312. The form comes with guidance notes to help you. When it is complete, send it to;

HM Revenue & Customs
PAYE
BX9 1AS

What information do I need to keep?

Keep:

  • a copy of the completed form R40 before you send it to HMRC
  • proof of postage from the Post Office recording the date you sent it to HMRC, in case of later query
  • the paperwork to support the claim for repayment for at least two years from the end of the tax year for which the claim is made
  • interest certificates and bank statements for each of your bank and building society accounts
  • paperwork relating to any other savings income, such as the interest element of a purchased life annuity
  • dividend vouchers, as you will need to include any dividends and their associated 10% tax credits on the form R40.

What information do I need to give HMRC to claim a repayment of tax?

Put your National Insurance number on the R40 form and in any accompanying letter.

You do not need to send interest certificates and bank statements with your claim, but HMRC might ask to see them before they process the form. If so, you will probably be asked for the originals. If so, take copies for your own records first.

Your bank or building society may not give you an interest certificate automatically, but you can ask them to send you one. The bank or building society have to send you a certificate free of charge if you ask for one and they have not sent one out before.

If you have lost an interest certificate and ask the bank or building society for a duplicate, they may charge you, so it is usually best to find out first how much a duplicate interest certificate will cost.

Do I have to wait until after the end of the tax year to make a claim?

You need not wait until the end of the tax year to make a claim, though you may have to make a provisional claim and a final claim if you cannot provide the exact figures if you claim before the tax year end.

How soon will I get my repayment of tax?

HMRC do not give specific guidance as to how long a repayment claim will take to process. HMRC sometimes want to check some things before sending your repayment, as part of their aims to prevent unscrupulous people claiming tax back fraudulently.

Between April and September following the end of the tax year there may be delays as this is the most popular time for sending in the forms.
You may also have to wait longer if HMRC decide they need to see supporting information, such as, interest certificates.

If you are worried that your repayment is taking a long time to appear, you should telephone HMRC on 0300 200 3300 and have your National Insurance number to hand.

Posted in: How do I claim back tax?