I have just seen the first personal impact of negative interest. Last your I overpaid Her Majesty's Revenue and Customs (HMRC), the UK tax collector. The mistake was entirely mine and only minor, but it is worth recovering money when you can.
My accountants wrote to HMRC explaining the error and requesting repayment and yesterday I received advice that they had agreed to do so. But I had to read it twice!
They identified the principle amount and then DEDUCTED an interest charge. In essence they have had my money and held it for months, earning on it and then they want to make more by charging me for the privilege of them holding it.
I knew things were bad, and that HMRC are trying to collect as much tax revenue as possible, but I did not know we were in a negative interest situation?
In truth I hope it was a clerical mistake and that as they are usually collecting money owed that does attract an additional interest charge, they just put the interest amount in the wrong column. I will check with my accountant later and see what they think.
Still the story of negative interest is a better one and possibly comments on the level of financial understanding enjoyed by those at HMRC processing claims such as this.
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