Why do I need to make a tax return when my only income is from Building society savings?

Question

Why do the society take the tax anyway when I am not due to pay tax.

Answer 1

Because the tax man has got a hook into you. They never let go.

You need to fill in an R85.

http://www.hmrc.gov.uk/forms/r85.pdf#search=%22r85%22

Answer 2

I guess you are saying tax as in income tax and not loco and state tax like property tax.

OK here is how it works. You live in a country, it doesn't matter which one. And a Tax is impost on to you to set up defense of that country, road, water treatment, and so on so forth. So that when you are living in that country you are using those serves. You pay taxes are when you get a job or buy goods and serves.

Tax is taken out when you get a paycheck, it is call withholding. If you chose not to withhold then you did not pay any taxes and you are using these services for free when every one else is pay their share.

A tax return is their figure out how much you as an individual in that country should pay base on your income. A return is there to tell you how much you pay (w2) vs. how much you owed. If you don't want to find out by doing a tax return then the government will find out for you. It is call an audit.

But Let say you have no taxable income. You should do a tax return because
1) Let the federal and state know what you income is cause they don't know you owed tax or not and they want you to have a chance to speak for you self.
2) You may have federal and state credit if you income is too low. Some credit are treated like money so if you have let say Earn Income Credit (EIC) or Property Tax Relief you may have money coming back to you. EIC may pay up to $4000.00

And if you don't know how to do a return most federal and state agency has freed serves to help you as well as information on free serves.

Answer 3

The tax return could be quiet helpful as i guess the IR owe you money. You can arrange for the building society not to take tax from your income by signing a form Rsomething or other.

Answer 4

you've an identical own allowance and an identical more beneficial cost band no matter in the experience that your income comes from low-priced costs or employment or both. also, the ten% tax cost nevertheless applies to the first £2,440 of income if that income is from low-priced costs only. once you do not have the different income you could note to have your pastime credited with none tax deducted. nevertheless, you could submit a tax go back on the top of the three hundred and sixty 5 days to declare again any overpaid tax. in case you earn a lot pastime that you're contained in the 40% tax bracket then you actually would ought to submit a tax go back to account for the added tax due. yet it truly is not likely because it is going to require something close to to £a million,000,000 at on the on the spot's costs of pastime. With that volume to make investments you'll placed it someplace that a) earned a extra ideal go back and b) changed into no longer challenge to uk income tax!

Answer 5

If someone gets sent a tax return they have to compleate this by law. If you fail to complete the return and do not submit it on time then you become liable to penalities.
You could possibly be recieving a return for many reasons. Probably due to the amount of interest you are recieving each year combined with some PAYE wages from previous tax year or even stocks/shares or inheritance tax you may have recieved

Answer 6

All income is added on to your earnings and assessed for tax.
Your allowance is deducted and the remainder taxed at varying rates.
If you have no earnings your B.S. interest is taxed if you are still over your allowance.
If you are below the tax Allowance you ask the B.S. for a form and after that is processed all your interest is tax free.
Do it now and you can claim back for the tax year 2005-6.
Ask the taxmen, who really are helpful, if you can go back further.

Answer 7

Because the law requires that they tax you.

And you make out your income tax forms, so that you can recoup that tax.

If your circumstances changed, and you were suddenly making more money, you would not be able to get back that tax.

The government will always make sure it gets THEIR share. You are secondary.

Answer 8

I agree with Phil.

If you have paid Tax on your interest then the tax return will help you claim it back. (assuming you havent registered for Gross Interest already)

Answer 9

Joe King , I am disappointed with the above answers. I've been keeping a watch on your interesting question. I have often wondered about this also.
The above 'answerers' are answering the wrong question.

Answer 10

Just talk to your local tax office...belive it or not they can be quite helpful!!