Claiming back tax overpaid on savings
A new version of the R40 form ‘Claim for repayment of tax deducted from savings and investments’ has been made available on HMRC’s website.
By law, banks and building societies must deduct 20% tax on savings interest. Individuals who have paid too much tax on interest can use the R40 form to claim back any overpaid tax. Claims can be backdated for up to five years from the 31 January following the end of the tax year. This means that claims can be made now for overpaid interest dating back as far as the 2005-6 tax year which ended on 5 April 2006. The deadline for making claims for the 2005-6 tax year is 31 January 2012.
The R40 form can also be used by taxpayers whose savings income should have been taxed at the 10% rate. Non-taxpayers who are eligible to receive interest gross of tax must complete form R85 and send it to their bank or building society in order to receive future interest free of tax.