How Do You Claim Back Taxed Savings Interest On A Teenagers Account?

[Retrochic]

My 14 year old has a 'Young Savers' Account with Lloyd's. He has received his annual Interest summary and they have taken £22 off his Interest payment in Tax. Surely he is not a Tax payer at 14 year sold and if he was his pocket money certainly comes way under the Annual Tax Allowance. All Googling seems to return answers that apply only to adults -anyone know how I can claim back this money for him ?

[CheekyChops]

From April 2016 the law changed to allow the first £1000 os savings interest to be paid tax free, so your son should be ok in future years.

For the £22 that he has already paid, he can claim that back (from the Direct.gov website):

If tax has already been deducted, fill in form R40 and send it to HM Revenue and Customs (HMRC). It takes about 6 weeks to get a refund.

HMRC
Leicester & Northants (Claims)
Saxon House
1 Causeway Lane
Leicester
LE1 4AA

[ubasses]

He needs to complete an IR85 to receive his interest gross. Get this from the Bank. If the tax has been taken in this tax year when the form is sent in he will get a refund. Otherwise you will need a form R40 from your tax office. The basic single persons tax allowance applies to your son.

[CheekyChops]

I mean that the information comes from the direct.gov website, not that he can claim it back from there ;-)

[MissLead]

But if the interest amounts to £100 (gross) or more in a tax year and is derived from capital given by the child's parent it is treated as the parent's income for tax purposes.

[hc4361]

Watch out if their savings comes from you
If you give your children money and it makes more than £100 a year before tax in interest (or £200 if both parents give money), all this income (not just the income over £100) will be taxed as if it were your own.

If income from your gift is likely to breach the £100 limit, then you should put your gifts in a tax-free investment. This can be a cash child trust fund (CTF) if you opened one before December 2010, or a tax free Junior Isa. The 2015-16 annual limit is £4,080.

The £100 limit applies to income from gifts from parents only, not other family members.

http://www.which.co.uk/money/savings-and-investments/reviews-ns/childrens-savings-accounts/children-and-income--tax/

[Retrochic]

Thank you for the speedy answers! The savings come from the child benefit payment I get every month for him (£82) -the one everyone gets, I'm not on ''benefits'. It goes in as a direct debt from my account so comes to £984 per annum. The interest on the balance this year was just over £90 before the tax was taken off. He has another account which he puts birthday money and pocket money in and uses it like a current account. I may consider a Junior ISA as this money is long term savings not to be touched until he is 18. I shall read all the links and in the mean time try and get the Interest back he has paid -he is not well pleased -£20 is a lot of money to a 14 year old -dare not tell him how much mum and dad pay in income Tax in a year lol!

[bednobs]

i'm not sure you can claim it back for more than the last year

[Retrochic]

Hi bednobs this is an update. I had to go to the bank to sort it out (20 mile return journey) and they said the tax should not have been taken off. When looking at his account the person setting up the account had ticked the 'Tax given as Net' instead of 'Tax given as gross'. They then informed me they could do nothing about it except make sure he was registered for Tax interest Gross and I would have to claim through the Tax Office on a R40 form.