Pensioners kept waiting for tax refunds

Published on Friday 20 November 2009 18:36

HUNDREDS of pensioners are still waiting for refunds from HM Revenue & Customs (HMRC) months after applying to reclaim overpaid tax.

Pensioners and non-taxpayers who have paid tax on interest from savings are entitled to claim it back using HMRC's R40 form.

But the tax office has admitted that because of computer software problems, up to 500 pensioners who have filed an application in the current tax year have not yet been refunded. The issue came to light just days after HMRC launched a TaxBack campaign to encourage pensioners who have overpaid tax on savings to claim it back. Scotsman reader Jean Strathdee, of Edinburgh, submitted her R40 form in May but has yet to receive a penny in refunds. "I rang them after a few weeks and they told me that everything was fine and that the refund was going through."

However it transpired that due to problems with systems that were installed in June, HMRC has been unable to process R40 claims. Only when The Scotsman raised the issue with HMRC was it confirmed that there had been difficulties making payments. It said the problems would clear when a systems upgrade begins next week, after which those waiting for refunds should be paid.

That will be too late to placate many pensioners, however.

"It goes along with many attitudes to pensioners – we're bottom of the pile," said Strathdee. "Getting my money back is not a matter of life and death, but a lot of people filling in the R40 form would have been relying on getting their money within the three or four weeks that it is supposed to take."

A spokesman from HMRC said the problem only affected pensioners getting income from savings, not from pensions.

Form R40 allows pensioners and other non-taxpayers to reclaim the 20 per cent tax deducted by banks and building societies from the interest on savings before it is paid. The average refund received by those who claim is estimated at around 200.

Pensioners and non-taxpayers can also ensure that future savings are not taxed by completing Form R85 and sending it to their bank or building society.

• For more information, call HMRC on 0845 366 7850 or visit www.hmrc.gov.uk/