PPI refund and tax

[Deleted User]

societys_child wrote: »

Another old post :huh: this time from last April . .

To be fair, this is the second time it's been bumped since then.

philharnott

societys_child wrote: »

Another old post :huh: this time from last April . .

Would be grateful for your view on this. A neighbour had a little under a thousand pounds of tax deducted from his 8%. He's a basic rate payer and he's just showed me a cheque from HMRC for whole sum.

[Deleted User]

philharnott wrote: »

Would be grateful for your view on this.

I recommend you learn how to start a new thread, Philhanott. It's really not difficult and you will garner far more relevant replies than bumping ancient threads.

Thanks.

philharnott

Moneyineptitude wrote: »

I recommend you learn how to start a new thread, Philhanott. It's really not difficult and you will garner far more relevant replies than bumping ancient threads.

Thanks.

I recognise the experience and knowledge of you & SC and would value your view/opinion/answer.

[Deleted User]

philharnott wrote: »

I recognise the experience and knowledge of you & SC and would value your view/opinion/answer.

Please start your own thread and elaborate therein what you want us to comment on.

philharnott

Moneyineptitude wrote: »

Please start your own thread and elaborate therein what you want us to comment on.

Quite straightforward: Neighbour had all tax deducted refunded by HMRC - £990+ - so why the reference to c £200 in the April post when deducted figure is almost £300? Simple question really.

Nasqueron

It's almost certainly a typo


You are taxed 20% on the 8% interest refund element, you can claim the lot back if you have earned less than £1000 in interest over the year

philharnott

Nasqueron wrote: »

It's almost certainly a typo


You are taxed 20% on the 8% interest refund element, you can claim the lot back if you have earned less than £1000 in interest over the year

My neighbour = 1 PPI loan complaint upheld and refund made & about £4800 is ( clearly detailed ) 8% of statutory interest & a tax deduction on that of £960. He has no other forms of savings & earned income is less than his tax free allowance. MSE and others, including HMRC, indicates that the ceiling for return of tax for him - and us all - should be £200. He thinks they've refunded £760 too much and that's how it seems to me. Just looked at his P60 for 17/18 - his PPI refund was in Feb - and total taxable emoluments is £11489.67.

Dazed_and_confused

It sounds like your neighbour will have been able to utilise the savings starter rate of tax where upto £5,000 of savings interest is taxed at 0% (the Personal Savings Allowance only kicks in after this).

If their only taxable non savings income (wages, pension etc) was the £11,489 then they would have had the full £5,000 savings starter rate available (plus £11 unused Personal Allowance).

They wouldn't actually have enough income to even be able to use the Personal Savings Allowance tax rate (also 0%).

This assumes they got the standard Personal Allowance of £11,500 i.e. hadn't applied for Marriage Allowance or claimed any expenses etc (tax code on P60 would normally be 1150L).

Dazed_and_confused

In an earlier post you referred to the neighbour as a basic rate payer - was this an assumption which turned out to be wrong or is there some additional information which hasn't been disclosed?