More than one and a half million people, including many older people, have not reclaimed tax they are owed. HM Revenue & Customs says that there is £300 million waiting to be reclaimed. If you do not normally pay tax, but tax has been deducted from interest paid since April 2002, then contact your tax office to make a claim. Even if you do pay tax, and your income is within about £2,200 of your tax allowances, you should also contact your tax office as you may be able to claim back some money from previous years.

If your total income is too low to pay any tax at all, then you can register with your bank or building society and have the interest paid to you gross. If you don't register, tax will be deducted automatically at 20p in the pound. To register for interest to be paid to you gross call the Registration Helpline at HM Revenue & Customs on 0845 980 0645. Alternatively, you can complete form R85. Your bank or local Revenue enquiry office may have a copy but the easiest way to get R85 is from the Revenue taxback website at the address given below.

Anyone who does not pay tax (or who should only pay tax on some of their investment income) can claim back tax wrongly deducted from their bank or building society interest. If you are owed more than £10 you can reclaim it at any time – you do not have to wait until after the end of the tax year. If you think you may be due a refund, you should call the Taxback Helpline on 0845 077 6543. If you paid too much tax in previous years, you can claim it back to 2003/04 – or 2002–03 as long as you claim it by 31 January 2009. They should send you a form called R40. You will need one form for each year you are claiming for. Alternatively, you can download the form from the Revenue taxback website www.hmrc.gov.uk

There is a lot more information about tax due on interest and
how to reclaim overpaid tax at HM Revenue & Customs website at www.hmrc.gov.uk/pensioners/gettingtax.htm

Investment income from jointly owned assets, such as a joint account in a bank or building society, is normally divided equally between the two partners. If you jointly own assets but in unequal shares, then the income can be divided unequally as long as you tell HM Revenue & Customs. If you do not say anything it will be taxed as if you owned it in equal shares. So if you have a joint account but only one partner pays tax, half the interest should be tax-free. Talk to your bank or building society to see if it can pay half the interest without tax being deducted. Otherwise you can claim it back by calling the taxback helpline or filling in R40.