HMRC R40 Form 2026: How to Reclaim Tax on Savings Interest

With savings rates at their highest levels in years, millions of UK savers are now earning meaningful interest. But many people -- particularly pensioners and lower earners -- may be entitled to reclaim tax that was deducted from their savings income. Form R40 is the mechanism for doing this if you do not file a Self Assessment return. Here is exactly how it works in 2026.

What Is Form R40?

Form R40 (Claim for repayment of tax deducted from savings and investments) allows people who are not in Self Assessment to reclaim income tax that was deducted at source from:

• Savings interest (from NS&I accounts, older fixed-rate bonds, or other products that paid interest net of tax)
• Dividends (in specific circumstances)
• PPI compensation payments (the statutory interest element had 20% tax deducted)
• Life insurance policy gains

You can file R40 online through your Government Gateway account, or download and post a paper version from gov.uk.

Who Needs Form R40?

R40 is for you if:

• You do not file a Self Assessment return
• Tax was deducted from your savings income or investment income
• Your total income is low enough that some or all of that tax should not have been paid

If you do file Self Assessment, claim any overpaid tax on savings through your annual return. Do not submit a separate R40 -- it creates duplicate claims and HMRC will reject one.

The Three Tax-Free Savings Layers

Understanding why you might be entitled to a refund requires knowing the three layers of tax relief that apply to savings interest in 2026/27:

Layer 1: The Personal Allowance

The first GBP 12,570 of all income -- from any source -- is tax-free. If your total income (earnings, pension, savings interest combined) is below GBP 12,570, no tax is due on any of it.

Layer 2: The Starting Rate for Savings

A 0% tax rate applies to up to GBP 5,000 of savings interest, available where your non-savings income (salary, pension, rental income, trading income) does not exceed GBP 17,570.

The GBP 5,000 starting rate band reduces pound-for-pound as non-savings income exceeds GBP 12,570.

Example:

This relief primarily benefits retired people with small pensions and people who took a break from work.

Layer 3: The Personal Savings Allowance

Interest within the PSA is received tax-free. Interest above it is taxable at your marginal rate.

Combined Example: How Much Savings Interest Can Be Tax-Free?

A retired person with non-savings income of GBP 10,000 per year (a small private pension):

• Personal allowance remaining for savings: GBP 12,570 - GBP 10,000 = GBP 2,570
• Starting rate band for savings: GBP 5,000 (full band available as non-savings income below GBP 12,570)
• Personal Savings Allowance: GBP 1,000 (basic rate taxpayer)
• Total savings interest that can be tax-free: GBP 8,570 per year

If any tax was deducted on savings interest below this amount, the full amount is reclaimable via R40.

Why Tax Might Have Been Deducted

Since April 2016, most UK banks and building societies have paid savings interest gross -- without deducting income tax at source. So for most current savings accounts and cash ISAs, no tax is deducted upfront.

However, tax may still be deducted from:

• National Savings and Investments (NS&I): Some NS&I products still pay interest net of tax
• Older fixed-rate bonds: Some legacy accounts deduct tax at source
• PPI statutory interest: Banks deducted 20% from the interest element of PPI refunds
• Life insurance policy gains: Tax may be deducted at the basic rate on some policy gains

If you received income in any of these categories and your total income was low enough, some or all of the deducted tax is reclaimable.

The Four-Year Claim Window

You must claim within four tax years of the end of the relevant tax year.

In 2026/27, you can claim for:

After 5 April 2027, the 2022/23 year closes permanently. If you think you may have a claim for that year, act before then.

Submit a separate R40 for each tax year -- HMRC does not process a single form covering multiple years.

How to Complete Form R40

Online (Recommended)

1. Log in to your Government Gateway account at gov.uk
2. Navigate to "Claim a tax refund" and select R40
3. Enter your National Insurance number and tax year
4. Declare all income sources for the year (employment, pension, State Pension, savings interest, dividends)
5. Enter details of any tax deducted at source
6. Provide your bank account details for the repayment

You will need any P60, P45, or bank statements showing interest received and tax deducted.

Paper Form

Download R40 from gov.uk/government/publications/claim-for-repayment-of-tax-deducted-from-savings. Post the completed form to HMRC PAYE and Self Assessment. Allow up to 12 weeks for processing -- significantly longer than online claims.

What Happens After You Submit

HMRC reviews your claim, cross-references it with income data held from employers, pension providers, and financial institutions, and calculates whether a repayment is due. You will receive a letter (similar to a P800) confirming the repayment amount, followed by the BACS payment to your bank account -- typically within two to four weeks for online claims.

If HMRC disagrees with your calculation, they will write to explain and give you the opportunity to provide additional evidence.

Common Mistakes to Avoid

• Claiming only the PSA and missing the starting rate band. The GBP 5,000 starting rate band is additional to the PSA and can be very valuable for lower earners.
• Not claiming for multiple years. Submit separate R40 forms for each eligible year going back up to four years.
• Declaring income incorrectly. Include all taxable income -- even State Pension at GBP 241.30 per week in 2026/27 -- as this affects which allowances apply.
• Filing R40 when already in Self Assessment. If you file an SA return, claim through that. Duplicate R40 claims create delays and HMRC will reject one.
• Missing the 2022/23 deadline. The four-year window for 2022/23 closes on 5 April 2027.

Know Your Full Tax Position Before Claiming

Before completing form R40, you need a clear picture of all your income -- from all sources -- for the relevant tax year. Use the CalcHub savings interest tax calculator to model your total income, apply all relevant allowances (personal allowance, starting rate band, and PSA), and calculate whether tax was correctly deducted. This gives you a reliable estimate of your refund entitlement before you submit the form, and helps you prepare accurate answers to every section of R40.