theOAP

Maybe a bit of housekeeping, tidying up lest some poor soul reading this thread goes away with a wrong idea.

Nun is correct, the UK State Pension is paid gross. However, if total income exceeds the personal allowance (not counting tax free such as ISAs), tax will be due, and the State pension amount is included in that total. That means, as nun said, other sources of income will be taxed and the tax will include provision (tax) for the State pension. So, it's paid gross, but may still be "taxed".

Cook_County

Someone somewhere needs to have 2 LPAs (Lasting Power of Attorney) for each of them. Someone - and it probably should not be you - needs to be named as their Attorney for both Money & Property, and separately Health & Welfare.
You are too far away to show up at UK institutions to act on their behalf, so are unlikely to be a suitable Attorney. If no LPA is created the Court of Protection will step in, but this is best avoided.
Until this current tax year Form R40 can be used to claim a refund, but this Form will soon become obsolete. Tax is however a minor issue. Do they receive Attendance Allowance? Tax credits? Council Tax reductions or credits?
Find a UK based relative they can appoint as their Attorney and a solicitor who can help get the LPAs drafted and registered.

MidAtlantic

This thread seems to have run away from the OPs original question (no surprise there!).
If a reasonable estimate of total income (sounds like that comprises UK pension and bank interest) is less than the personal allowance, the bank interest may be paid gross by completing an R85 for each account and sending it to the bank.
There is no need to complete a "tax return" unless asked to do so by HMRC. Very strange for US people, I know, but the UK system is far ahead of what we have here in that respect.
Talk of Power Attorney seems inappropriate from what the OP says.

nun

I agree with everything except the last sentence. Someone resident in the UK should get power of attorney incase anything happens. This is something that my mother refused to do and it cause a lot of worry. In the end it was not an issue. However, when she died her solicitor was the executor and I had to pay some quite large initial expenses myself and then get reimbursed from the estate.

Neillc37

Thanks guys. So it looks like I should investigate R85 as a step forward. R40 as a one time deal I guess for 2015. I should be able to understand this when I see the income numbers and compare to the UK tax limits (standard deduction, personal exemption lookalikes).
People seem to have read into this more than there is. My sister and family live almost on my parents doorstep. So there is no problem with me being a long way away except when they get a computer problem! My sister and her husband don't seem to know anything about money though.
My mom is impaired mentally by a recent brain operation. She knows she is impaired. My parents are extremely frugal people. My mom would be devastated if I lost a pound when a child for example. She is worrying about this R40 form and wants me to handle it. My father doesn't want to step in as he used to run away from school as a child. As a consequence his three R's are compromised. We could be talking about small numbers here that they get back as well.
So I figured people here could quickly quote forms and procedures that would get me to the right place a bit quicker.
Honestly while I worked in the UK for 12ish years I never had to file a tax return so my understanding of the UK tax system beyond the UK/US tax treaty is at zero.

yellowroom

the vast majority of UK people will never have to file a tax return either. If your parents are of modest means, it very likely their tax is fine and up to date. HMRC are quite pro-active.

For example, I returned to the UK from the US last summer. On my return I was taxed at the higher emergency rate for several months. HMRC noticed that (as far as they were concerned) I had overpaid my tax last year based on my salary and sent me a cheque in September, without me doing anything whatsoever.

[had to ring and get them to cancel the cheque and tell them I would be submitting a tax return, they were fine with that too]

Compared to the US, UK tax is so simple it can feel like you're missing something, but from what you've said it seems very unlikely there will be any outstanding problems with HMRC.

theOAP

Warning, I'm about to take this thread way off course again.

@Neill
As you've ascertained, with simple sources of UK income, the UK tax system is incredibly simple compared to the US.

@yellowroom
At some point, you may be in receipt of a UK company pension and a non-UK (foreign) pension. If so, you'll learn to hate the new HMRC digital tax system. Any mistake it makes can be handled without too much inconvenience in the UK, but it can make a balls up of things if you're required to file a US return. Unless stopped, when generating a tax code, it will ignore the foreign pensions (even with self assessment) and only consider the UK company/State pensions. Not a problem in the UK, you correct the code via HMRC or you can pay later, but you may find you have insufficient tax withheld for a particular year for the US using 1116 FTCs. Cue excess credits from prior years. Just a heads up if you ever find yourself in this position.

I was on the phone (again) to HMRC today.

Rant over.

yellowroom

Thanks for the heads-up! I will have a small US pension and a 401k to deal with. I have 20+ years to go before I have to worry about them too much though. I am putting off worrying about them as I suspect the tax landscape between now and then will change on both sides of the atlantic.

I do hope your situation resolves soon, it must be very frustrating!

durham_lad

I believe that starting in 2016 that the first £1,000 of interest will be tax free so that should be one less complexity, although if you do file an R85 this year that should continue to be valid.

mrken30

Do bank accounts with interest even exist these days? Most are a lot less than 1%.

mrken30

I am wondering if contacting Age Concern or HMRC might be worth a try

Cook_County

or Tax Help for Older People, who Age UK will probably refer tax questions to.