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

happyandcontented

Dazed_and_C0nfused said:

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.

Thanks, If one is a lower earner can they declare it on their SA solely? or if a joint account should it be split between both SA forms?

Dazed_and_C0nfused

happyandcontented said:

Dazed_and_C0nfused said:

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.

Thanks, If one is a lower earner can they declare it on their SA solely? or if a joint account should it be split between both SA forms?

If the interest was paid out in joint names then you have to declare half each.

Brisbaneroad

I wrote to them, with copies of the letters advising the PPI refund and tax that had been taken. Today I got a letter advising that I had a refund due of about £150. Was able to claim it by "P800" very easily. I think I filled in the R40 correctly so it maybe took a bit of human intervention.

rhonag

Dazed_and_C0nfused said:

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)

  My forms say 
premium refund
interest paid on premium 
gross interest
witholding tax 
rebate
total payable 
the other one says
premiums and interest
simple interest 
tax
total

rhonag

I’m still a bit confused!
my form says 
PPI premium refund
interest paid on premium
gross interest
witholding tax
rebate
total payable 
other one says 
premium and interest 
simple interest
tax
total paid 
thanks

Dazed_and_C0nfused

Is the gross interest 5x the tax deducted amount?

rhonag

Yes, so does that figure go in one of the boxes?  And what other figures go where? Thanks 

Dazed_and_C0nfused

The gross interest is box 3.3

Tax deducted is 3.2

Net interest is 3.1 (lessand is the gross amount less the tax)

elcid

Hi. New to this site. I have been trying to complete the form R40 (claim for repayment of tax from savings and investments)  but could not find anything related to PPI.     
Just a note that I am now retired for nearly 3 years now and had had succesful claims for PPI.  for the financia year  2018-2019.I had tax deducted from them.
Just wondered if I am suitable to Perdue this with tax office?
Thanks
Siddick

Dazed_and_C0nfused

You do know PPI refunds aren't taxable and don't have tax deducted from them?

Only the statutory interest/compensation paid alongside the PPI refund is taxable and has tax deducted.

What are boxes 3.1, 3.2 and 3.3 on the R40 for?

Being retired really has no relevance.  What taxable income did you have in the 2018:29 tax year?