Martin Lewis: Had a PPI payout? If so, you can reclaim the tax on it

DaveCartledge

I got a £2800 refund of ppi with tax stopped sometime within the last couple of years .  The bank told me to contact HMRC.  But I can't trace the date of the payment to get it back and the on-line form doesn't help.  Any Ideas would be greatly appreciated.

Dazed_and_C0nfused

You need to ask the bank for the details.

PPI refunds aren't taxable income and no tax is deducted from them.

The statutory interest/compensation paid alongside the PPI refund is taxable and tax is usually deducted.

Do you have some expectation of what tax refund you might be getting?  This is important as a lot of people reading the MSE blog have misunderstood it and are getting an inflated idea of the refund potentially due.

SarahjWalters

How does this relate to PPI claimed back for deceased relatives?

Dazed_and_C0nfused

SarahjWalters said:

How does this relate to PPI claimed back for deceased relatives?

Was the statutory interest/compensation paid out before or after death?

gammledansk

Im not sure if I am on the correct page for a reply (hopefully) but:  I had PPI payouts in 2019, I completed R40 but had a reply from HMRC to say that they cannot asses my claim until after this tax year.- as I stated ' no savings' ( I dont have any) Is this right or have I misunderstood something?

Dazed_and_C0nfused

What does 2019 mean?  2018:19 tax year or 2019:20??

What exactly did you enter on the R40. 

Brisbaneroad

I used the online form - was that a mistake? It had nowhere to say exactly what you were reclaiming, and within a couple of days I got a letter saying I had paid the correct tax for that year (2018/19). I will try writing back with copies of the letters detailing my PPI repayments which were received during that tax year.
I'm also wondering if the amount of tax I can reclaim is only for the interest earned in the actual years when the new tax rules applied? My claim was for a long period of time, only a small part of the interest would have been earned since 6/4/2016. The original post by Martin implies that you get it all back, but I can't believe HMRC would be that generous!

Dazed_and_C0nfused

I think you have got incredibly confused.

Firstly PPI refunds are not taxable income and do not have tax deducted.  

The statutory interest/compensation paid alongside the PPI refunds is taxable and usually has tax deducted.

Each payment of statutory interest/compensation relates or the tax year it was paid to you in.  The fact it may be for a period of say 20 years is irrelevant.

What exactly do you mean that your claim was for a "long period"?
An R40 is for a particular tax year.

I think you have probably misunderstood Martin Lewis's article as although not 100% correct it is along the right lines.

What interest figures did you enter on your 2018:19 R40?

Brisbaneroad

No I'm not c0nfused, I understand that it is the interest that is taxed. And as I stated, I didn't see anywhere in the online form to say what amount I was claiming, or what it was for. Perhaps I missed something.

Buy a "long period" I mean that most of it was before the tax-free savings limit was introduced. But you have clarified that that isn't relevant as the repayment was since that rule came in, so thanks for that. I am writing back and hopefully that will sort out the refund.

Dazed_and_C0nfused

You aren't really "claiming" anything.

An R40 is just a simple tax return for you to declare all your taxable income.

HMRC then review your tax position for that year and send you a bill or refund as appropriate.

The section you need is for taxed interest.