Income Tax Act 2007 section 17

Repayment: tax paid at greater rate instead of starting rate for savings or savings nil rate

Section 17 provides a right to reclaim overpaid income tax where savings income has been taxed at a higher rate than the taxpayer's actual liability, specifically where the starting rate for savings or the savings nil rate should have applied instead.

• Where income tax has been paid at a rate higher than the starting rate for savings on income that should have been taxed at that lower rate, the taxpayer is entitled to claim a repayment.
• Similarly, where income tax has been paid at a rate higher than the savings nil rate (0%) on income that should have been taxed at the savings nil rate, a repayment claim may be made.
• The repayment is not automatic — the taxpayer must submit a claim before any overpaid tax will be refunded.
• This mechanism operates outside self assessment, covering situations where tax has been deducted at source at a rate exceeding the taxpayer's true liability on their savings income.