Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Fri, 09 Dec 2022 15:05:47 GMT by rakeshmg
Hello, I have a fixed deposit that was opened in the year 2018 and maturity date in 2028 at an interest rate of 6% per annum. I have been paying tax on the interest income on arising basis although interest was never withdrawn from the account. As per the deposit terms, penalty for premature closure is 0.5% for the full tenure of the deposit. I have chosen to close the deposit now, so effectively I was paid only 5.5% from the year 2018 onwards. But I have paid tax on the basis that my interest income would be 6%. Can I claim back the excess tax paid ? This is similar to example 2 on here but it does not mention anything about tax relief or claiming back excess tax when income is reduced on withdrawal: https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2440 Thanks, Rakesh
Posted Mon, 12 Dec 2022 16:35:19 GMT by HMRC Admin 32
Hi,

It is possible to claim back for the previous 4 tax years. If you do not complete Self Assessment tax return, you should submit a letter advising the revised amounts of interest for the previous 4 tax years.

If you complete Self Assessment tax returns, you can amend the tax returns for the tax year 2020 to 2021 no later than 31 January 2023. For tax year 2021 to 2022, no later than 31 January 2024.  

For 2018 to 2019 and 2019 to 2020, you will need to make an overpayment relief claim (OPR).  

Guidance on making an overpayment relief claim can be found here.

SACM12150 - Overpayment relief: Form of claims

Thank you.

You must be signed in to post in this forum.