Pensioners urged to claim back overpaid tax

Tuesday, November 10th 2009

Retirees who are now claiming a pension should ensure they are not paying more tax than they need to when it comes to the interest on their savings.

This is according to HM Revenue & Customs (HMRC), which says that non-taxpayers and those qualifying for the ten per cent rate may still be charged the full 20 per cent tax rate on their savings interest.

Pensioners should therefore fill out HMRC's R40 form to make sure they claim any overpaid tax back, it says.

They can also fill out form R85 to make sure all future savings interest is paid gross.

Sarah McCarthy-Fry, exchequer secretary to the Treasury, commented: "We know times are tough for many pensioners and we don't want anyone paying tax they don't need to."

Britons who reach state pension age do not have to pay National Insurance contributions, but their income may still be taxed if it exceeds the government's tax-free limit.