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

Dazed_and_C0nfused

Tax isn't deducted from PPI refunds, it's only deducted from the (taxable) statutory interest that is paid alongside the PPI refund.

If you weren't normally a taxpayer in each year you have completed an R40 for then you would usually get a refund of tax deducted from the statutory interest.

But is it possible you have declared non taxable income (the actual PPI refund?) on the R40 by mistake which has resulted in a bill?

Can you give the figures from one R40 where you have ended up with a bill?  Everything you declared on one years form.

Uchenna

I made an R40 claim, but HMRC have used the details and calculated that I owe them tax on the PPI payout that was made to me. Is that correct?

Dazed_and_C0nfused

Why did you tell them about the PPI refund?

Only the statutory interest paid alongside the PPI refund is taxable (and has tax deducted).

Have you made a mistake when you completed the R40?

Or are you a higher rate payer?

Molly4

Good Morning,
I hope this is the right place to post this or can someone direct me to the correct thread? 
I am completing the R40 form to claim back tax paid on a PPI claim I have received. 
I am confused by the terminology when inputting details on the interest.
The R40 form asks for 
**************************************************************************************************************************************************

UK interest

Do you receive income from UK interest?

Yes

No

Net interest paid by banks, building societies etc, purchased life annuities and PPI payments

After tax taken off

£ 

Tax taken off the gross interest paid by banks, building societies and purchased life annuities

£ 

Gross interest paid by banks, building societies and purchased life annuities

Before tax taken off

£ 

Do you receive interest that has not been taxed at all?

Yes

No
**************************************************************************************************************************************************
On my PPI award I have the following details:
Total refund of PPI premiums and associated interest paid to date
Statutory interest (Gross interest at 15% added up to 31st March 1993 and at 8% from 1st April 1993)
Less income tax on statutory interest (20%)
Net offer

Whilst the income tax figure is the only one that is clear to me how do I calculate the gross and net interest figures? The "statutory" interest figure appears to be gross interest on each PPI premium payment but the "total refund" figure is both PPI premiums and associated interest. 

I my query makes sense.
Regards
molly57 

Molly4

From molly57
Sorry forgot to add I have spoken to HMRC on Live Chat this morning and the operative was not able to answer this query for me.

debmc61

Hi, I have recently completed a claim for PPI tax for the tax year 2017/18. I have received a reply back saying it is too late to amend a self assessment for that year and it should have been completed before 31 January. I am confused as I have not gone beyond the 4 tax years. Can you help please? 

Dazed_and_C0nfused

If you mean you completed form R40 then you shouldn't have done as that doesn't apply to people who have competed a Self Assessment return for the tax year in question.

Self Assessment tax returns have a shorter time limit for people to be able to amend an incorrect return (presumably you failed to declare the taxed interest paid alongside your PPI refund?).

You need to Google "overpayment relief" and look at the instructions on gov.uk on how you can make a claim now you have missed the deadline for amending your return.

RachPolly

Hi Martin. We completed R40 form online 29th March. Had an email with reference number but no news as yet. However, on our gov gateway it does state we have processed and it’s completed. We’ve have had no information sent. Tried web chat and phone but cannot get thru. Any advise would be grateful. Many Thanks 

Jag2000

Dear Marin, i had a phone call some months back, the agent told me i could get the tax back on the PPI i claimed for, she said there will be no fees or vat to pay , and i would get the full payment. I received a letter from the inland revenue telling me they had sent the check to the solicitors, after the allotted 14 days i had to call them , they paid the same afternoon, but took out the 39% & vat, should they have done that and will i get it back. ..? 
Kind regards 
Andrew.

Vix26

Hi Martin,
I hope you're well :-)  Thanks for all the advice so far, it's been a God send!
I've just submitted R40 forms for my husband for 2 different tax years where he had PPI pay-outs, the totals as as follows:
Tax Year 18/19 - Gross interest £4063.40, Tax Deducted £812.68, Net interest £3250.72
Tax Year 19/20 - Gross interest £3696.49, Tax Deducted £739.29, Net interest £2957.20
Is it likely we'll receive the full tax amounts back? My husband is basic rate taxpayer and is not near the higher tax threshold and has no interest from savings at all as he has none.

Also, is there any way to claim the tax back on PPI pay-outs if you no longer have the paperwork with the figures?  Could you just write to tax office and ask them to investigate?  I earn under the basic income every year and so do not pay any tax but I also had some PPI payouts which I no longer have the paperwork for - is there any way to track these down and re-claim the tax?

Thanks so much in advance!