Is PPI tax paid linked to individual tax accounts and NI numbers?

moggaletti

Is PPI income tax paid as some sort of blanket agreement between the banks and HMRC, or is it paid in ones name and matched up to NI number and tax account?

I assume it is the same process as when banks deduct interest on any other savings.

Does anyone know exactly how this system works?

Thanks.

societys_child

The banks are instructed to deduct 20%, higher tax payers are required to contact HMRC to pay more, none tax payers should be able to claim it back using form R40.

I assume it is the same process as when banks deduct interest on any other savings

I imagine that's correct.

Dazed_and_confused

No idea if it's connected to her tax records but as it's her income she may be able to get some of the tax refunded even if she is paying tax on any wages or pension income she receives.

Some lower earners get upto £5000 savings interest taxed at a special rate of 0% and all basic rate payers also get upto £1000 savings income taxed at a rate (confusingly called the personal savings allowance) of 0%.

All depends on what other savings interest she has and how much her salary/pension income is in the tax year the PPI interest was paid in but chances are she'll be able to get some sort of a refund.

moggaletti

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Dazed_and_confused

Why does it matter, either it will be there and it will save her typing a few figures or it won't and she'll have to type the interest figure and tax deducted into her return.

According to gov.uk banks do share interest details with HMRC but that appears to be in reference to normal interest (which no longer had tax deducted at source) and not necessarily interest added to PPI payments??

With income in excess of £150k she could maybe consider using an accountant?

moggaletti

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