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

rhonag

Hello I am filling out form R40. For  a PPI tax claim.   I’m confused what amount goes where at 3.1. Interest? Totals etc?
thanks 

Dazed_and_C0nfused

rhonag said:

Hello I am filling out form R40. For  a PPI tax claim.   I’m confused what amount goes where at 3.1. Interest? Totals etc?
thanks 

What was shown on the PPI payout details?

You should be looking for the statutory interest/compensation figure and tax deducted amount.

rhonag

I’m unsure what goes where in each box?
thanks 

rhonag

It’s the top one about interest? 

Dazed_and_C0nfused

Boxes 3.1, 3.2 and 3.3 all relate to the statutory interest/compensation element of a PPI refund.

Box 3.4 is for normal untaxed interest from banks, building societies etc.

So for 3.1, 3.2 and 3.3 you need the details from the PPI refund.

It might be something like
3.1 = 8 (net amount)
3.2 = 2 (tax deducted)
3.3 = 10 (gross amount i.e. net plus tax)

RobinGossard

You must claim your tax back from HMRC ,I have claimed back £1500+ and as not working just now it's money well needed! 

happyandcontented

We have just had notice of a surprise PPI refund and it is in joint names as it was a joint mortgage PPI policy. We are both taxpayers one higher, one lower.  How does the tax refund element work in that circumstance? We haven't had over £1000 in interest in the 2019/20 tax year.  
We both do self-assessment forms. I understand that makes a difference? DO we need to wait till we next do one to reclaim the tax?

MelanieDevon

Can anyone help me?  I am so confused.  I was taxed on a PPI claim payout in April 2015. So filled in the R40 and popped it in the post as per Martin's guidance on This Morning … have heard nothing from HMRC.... so I called them - who say I am not entitled to a refund as it pushes me into the higher earning bracket???  I thought PPI was seen as savings as such we can have up to £1000 interest which equates to £50k savings..... which I don't have... and when I quoted the MSE website they person at HMRC cut me off..... which is highly unprofessional....  I'm sure I am not the only one who has experienced this... I  earnt just under £28k in 2015-16....  Help :-( I just don't understand - I was taxed - am not a high earner and struggling to get a rebate.... what am I doing wrong? thanks

Dazed_and_C0nfused

happyandcontented said:

We have just had notice of a surprise PPI refund and it is in joint names as it was a joint mortgage PPI policy. We are both taxpayers one higher, one lower.  How does the tax refund element work in that circumstance? We haven't had over £1000 in interest in the 2019/20 tax year.  
We both do self-assessment forms. I understand that makes a difference? DO we need to wait till we next do one to reclaim the tax?

The statutory interest/compensation is just another type of taxable income (taxed interest) which you need to declare on your Self Assessment returns.

Yes you need to wait until you can file your next return.  Which is in 6 days time.

The income, and tax deducted, will be part of your Self Assessment calculation (SA302).  Exactly how it will impact you will depend on your overall tax position.

Dazed_and_C0nfused

MelanieDevon said:

Can anyone help me?  I am so confused.  I was taxed on a PPI claim payout in April 2015. So filled in the R40 and popped it in the post as per Martin's guidance on This Morning … have heard nothing from HMRC.... so I called them - who say I am not entitled to a refund as it pushes me into the higher earning bracket???  I thought PPI was seen as savings as such we can have up to £1000 interest which equates to £50k savings..... which I don't have... and when I quoted the MSE website they person at HMRC cut me off..... which is highly unprofessional....  I'm sure I am not the only one who has experienced this... I  earnt just under £28k in 2015-16....  Help :-( I just don't understand - I was taxed - am not a high earner and struggling to get a rebate.... what am I doing wrong? thanks

The £1,000 tax band you refer to only came into existence in the 2016:17 tax year.

Someone earning £28k in 2015:16 will not normally be due any tax refund as the 20% tax deducted from the statutory interest/compensation is the correct amount.