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  • FIRST POST
    • runninglea
    • By runninglea 10th Jul 17, 2:17 PM
    • 784Posts
    • 1,136Thanks
    runninglea
    PPI Repayment & Interest less 20% income tax
    • #1
    • 10th Jul 17, 2:17 PM
    PPI Repayment & Interest less 20% income tax 10th Jul 17 at 2:17 PM
    I have just received a letter from RBS:- dated 6/7/17

    £862.68 PPI repaid, Statutory Interest £996.95 less £199.39 income tax

    Is this correct that income tax is taken off?

    Can I reclaim if I'm a basic rate tax payer and if so how?

    Many thanks for any responses received
    Year 2016 (5100/£17068mortgage repayment)Overall mortgage (27,200/165568) (16.5%) (16/100) payments made. Total paid 2016 year £5,100
    Total paid 2016 year £5,100
Page 1
    • -taff
    • By -taff 10th Jul 17, 7:37 PM
    • 7,217 Posts
    • 4,623 Thanks
    -taff
    • #2
    • 10th Jul 17, 7:37 PM
    • #2
    • 10th Jul 17, 7:37 PM
    Get in touch with the HMRC
    • amersall
    • By amersall 11th Jul 17, 8:13 AM
    • 16,637 Posts
    • 18,675 Thanks
    amersall
    • #3
    • 11th Jul 17, 8:13 AM
    • #3
    • 11th Jul 17, 8:13 AM
    You can claim it back, if, you are a non taxpayer, or, you earn below your tax allowance.
    If non of the above apply, you will not get it back.

    • Dazed and confused
    • By Dazed and confused 11th Jul 17, 8:45 PM
    • 1,483 Posts
    • 621 Thanks
    Dazed and confused
    • #4
    • 11th Jul 17, 8:45 PM
    • #4
    • 11th Jul 17, 8:45 PM
    Previous responses don't tell the whole story.

    As a basic rate taxpayer you can have a maximum of £5999 interest which gets taxed at a rate of 0%.

    For a lot of basic rate payers i.e. those with wages (or pension income) of at least £16,500 the maximum is limited to £1000 taxed at 0% (this is somewhat confusingly known as the personal savings allowance).

    First thing to do is to check if you are still a basic rate payer with the £996 and any other interest you receive added to your income. If so you qualify for the £1000 personal savings allowance rate band where upto £1000 of your savings interest is taxed at 0%.

    If you are a basic rate payer and this is your only interest then you will be entitled to all of the £199 back.

    If you have to fill in tax returns for some reason it will be sorted when you fill in the 2017:18 return otherwise you just need to write to HMRC, after 5 April 2018, confirming all your income details - P60 details etc - so they can calculate your tax position for the year.
    Last edited by Dazed and confused; 11-07-2017 at 9:06 PM.
    • -taff
    • By -taff 12th Jul 17, 8:33 PM
    • 7,217 Posts
    • 4,623 Thanks
    -taff
    • #5
    • 12th Jul 17, 8:33 PM
    • #5
    • 12th Jul 17, 8:33 PM
    Interest on PPI payments fall under the £1000 a year you're allowed to earn before tax on any savings,
    • Welshie28
    • By Welshie28 15th Jul 17, 1:42 PM
    • 88 Posts
    • 83 Thanks
    Welshie28
    • #6
    • 15th Jul 17, 1:42 PM
    • #6
    • 15th Jul 17, 1:42 PM
    Hi, any compensatory interest is subject to income tax deducted.
    You would require an R40 form which is available from the HMRC to try and claim it back.
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