Form R40 – Tax Repayment Claims
Trust income is a problem! Where a taxpayer has a received income from an interest in possession trust the HMRC computer is not calculating the correct repayment due. This appears to stem from the introduction of the personal savings allowance and dividend allowance from 6 April 2016.
HMRC has said it has identified a workaround that should address this issue in most cases, but it has no method of searching through all the R40s submitted to check if the tax repayment was correct.
So the advice is to check the tax calculation that HMRC issue.
There appear to be no plans to fix the problem so it might be better to complete a self-assessment tax return.
Also HMRC have claimed that due to a change in banking regulations they need to have a taxpayer’s paying in slip in order to pay the refund electronically to their account! There is no space on the R40 to give these details so HMRC will send out a cheque! So much for progress and the inconvenience that this causes. Again it might be better to use the self-assessment system to obtain the repayment and it is likely to be quicker!