Which form for claiming interest on overpaid income tax?
Which form for claiming interest on overpaid income tax?
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uknick

Original Poster:

1,066 posts

214 months

Sunday 25th October 2015
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In 2014-15 too much income tax was deducted from a payment made by my company pension scheme. Despite the overpayment being a mistake by their staff the scheme refused to make the repayment saying it had to come from HMRC.

It took 6 months for HMRC to organise a refund after being told of the error. However, the amount repaid by HMRC didn't include any interest on the overpayment.

I've looked at the section in the HMRC manual covering repayment interest, "CH146020 - Interest: Repayment Interest", but can't find any reference to the form I use to claim the interest.

Can somebody point me in the right direction?

Eric Mc

125,754 posts

295 months

Sunday 25th October 2015
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If interest is due, it is usually added automatically to any refunds paid. HMRC call it a "Repayment Supplement". What tax year does the tax refund relate to and how long after the end of that tax year was the tax refunded to you?

Was the refund given to you through an adjustment to your tax code or did you get an actual tax refund payment directly from HMRC?

uknick

Original Poster:

1,066 posts

214 months

Sunday 25th October 2015
quotequote all
Eric Mc said:
If interest is due, it is usually added automatically to any refunds paid. HMRC call it a "Repayment Supplement". What tax year does the tax refund relate to and how long after the end of that tax year was the tax refunded to you?

Was the refund given to you through an adjustment to your tax code or did you get an actual tax refund payment directly from HMRC?
The lump sum was paid by my pension provider in January 2015 and the tax refund was made in July 2015. As you say, I expected the July repayment to have included the supplement.

The lump sum from my pension provider should have been tax free but they deducted tax at source.

As I no longer work an adjustment through PAYE is not possible. In addition the amount refunded was quite large, so I would've opted for a lump sum payment anyway.

I know I can call HMRC and wait for 30 minutes or so for them to answer, but a couple of years ago I had to call them about another tax overpayment and their initial advice about which form to use was incorrect delaying the repayment process.


Eric Mc

125,754 posts

295 months

Sunday 25th October 2015
quotequote all
I've never come across a specific form to claim "interest" as a separate exercise. I'd phone them and ask why they didn't automatically give you any interest.

It could be because of this - "HMRC must pay interest on a tax refund if the repayment is made after 31 January following the end of the tax year in which you overpaid the tax".

The above quote is from the Citizen's Advice website.

uknick

Original Poster:

1,066 posts

214 months

Sunday 25th October 2015
quotequote all
Thanks Eric. I'll call them this week.