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R40

Form R40: tax taken off savings and investment income

Banks stopped deducting tax from ordinary interest in 2016, but tax is still taken from some payments: the interest paid with a PPI payout, some trust and estate income, purchased life annuities. If you do not file a tax return and your savings income is within the limit, R40 claims it back.

Who it is for

  • Tax was deducted from interest, dividends or other investment income, including the interest part of a PPI payout.
  • You do not file a Self Assessment tax return for the year.
  • Your gross savings and investment income for the year is £10,000 or less; above that, HMRC asks for a tax return.

How to claim

  1. 1Claim online on GOV.UK, or by post if you are claiming for someone else.
  2. 2One claim per tax year; you can claim the current year and the previous 4.
  3. 3Enter every source of income for that year, not just the one with tax taken off.
  4. 4Send the interest statement or PPI letter when HMRC asks for evidence.

What happens next

HMRC recalculates the year and repays the tax that exceeds what was due. If your Personal Savings Allowance covered the interest, the whole deduction comes back.

What to have ready

  • The statement showing the gross interest and the tax deducted: for PPI, the payout letter from the lender.
  • Your National Insurance number.
  • Your other income for the year, so HMRC can work out the tax actually due.
  • Bank details for the repayment.

Worth knowing

PPI: only the interest part of the payout was taxed, not the refund of premiums. The lender’s letter shows the split.

The form on GOV.UK