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Martin Lewis: Had a PPI payout? If so, you can reclaim the tax on it - Page 3

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

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  • edited 12 April 2019 at 8:57AM
    Dazed_and_confusedDazed_and_confused Forumite
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    edited 12 April 2019 at 8:57AM
    Do you mean £4850.88 was paid into your account?

    Or was it £4850.88 less the tax (possibly £353.46)

    Joint would normally be half each.

    As the interest was received in 2017:18 then your husband can still have £1,000 interest taxed at 0% so unless he has a fair bit of other taxable interest then he may well be due most if not all of his share of the tax back. But this does depend on the other interest he received.
  • edited 12 April 2019 at 12:06PM
    LincsCatLincsCat Forumite
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    edited 12 April 2019 at 12:06PM
    We had £4850.88 paid as a refund into our bank account. Once I find out how much HSBC deducted as the standard 20% tax, I presume both of us should fill in the R40 tax form for half each?

    Update: I've spoken to HSBC and they said the 20% deduction was £441.82
  • Dazed_and_confusedDazed_and_confused Forumite
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    That figure makes sense.

    Gross interest of £2209 less tax £441.82 is the net interest of £1767.

    Yes, an R40 is the right form. Remember it is basically a tax return (similar to Self Assessment) so you need to include all your taxable income for the tax year, wages (as per your P60's), PPI interest and any other taxable income.
  • Thank you so much for all your help - I've never looked at tax before and it's rather confusing for me!
  • Hi. I received a payment into my bank on Thursday last week (11th April) and on the letter it states I have been deducted £243 tax. Am I able to claim this back yet or do I have to wait until next year as it was paid into my account after 6th April, cut off for doing last year's tax return I believe.
  • LBirchLBirch Forumite
    2 posts
    Hi Martin I received a huge payout from M&S of £5666 in February of this year, also £1700 from NatWest in May & August last year. I am so confused as I also earnt paid work totalling £3066 in the year 2018/19 (rest of the year unemployed). The form asks for taxable work to be entered but of course I didn't pay tax as it was well below my allowable limit. Do I enter all of the taxable income & the PPI as one figure or separately? Also how do I know what the interest was on the PPI (in Boxes 3 & 3.1)? I haven't had any details on tax for the payouts as they were paid directly into my Bank A/C. Thanks Lisa
  • Dazed_and_confusedDazed_and_confused Forumite
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    Do I enter all of the taxable income & the PPI as one figure or separately? Also how do I know what the interest was on the PPI (in Boxes 3 & 3.1)? I haven't had any details on tax for the payouts as they were paid directly into my Bank A/C.

    Yes you have to enter any income from a job. Just because no tax was deducted at the time doesn't mean it isn't taxable income.

    You do not enter PPI refunds on an R40. You have to find out the interest element and the tax deducted from that. Those are the amounts you need for the R40. If you enter the PPI payout in full your refund will be calculated using that figure which will mean you might get less than you are due back as a tax refund.

    Each type of income has to go in the relevant section. Interest in the interest bit and wages in the earnings/employment bit.
  • [Deleted User][Deleted User]
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    Eighth Anniversary 10,000 Posts Name Dropper Photogenic
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    LBirch wrote: »
    I haven't had any details on tax for the payouts as they were paid directly into my Bank A/C.
    You should have also received a letter upholding your complaint and providing a breakdown of the refund, interest and tax.

    If you no longer have this, ask the Bank to provide another breakdown..
  • LBirchLBirch Forumite
    2 posts
    Hi Martin you responded to my query but sorry I'm more confused then ever!

    You say "you cannot claim PPI tax on form R40" but that's the form you have linked to complete?

    Also there are not "box 3.0, box 3.1 etc" on the R40. All it says on the form is "Total pay from all employments, before tax is taken off (gross pay) from P60/P45" then the next box down says "Tax taken off the total pay from all employments" that's it.

    Help, help! thank you
    Lisa
  • Dazed_and_confusedDazed_and_confused Forumite
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    HMRC are not interested in your total PPI payout.

    It is the interest (and tax deducted from that) which matters for tax purposes.

    You might be better off using the print and post version of the R40.

    The R40 is like a Self Assessment tax return. You have to declare any taxable income for the year concerned. For example there will be sections for employment income and pensions as well as interest. You have to declare the income you received from every taxable source and any tax deducted. Then HMRC can calculate if any refund is due. If a section doesn't apply i.e. you had no pension income them leave it blank.

    You fill in an R40 for each tax year you are claiming for. For most people it will be one form but some posting on here have received PPI interest in different tax years so more than one form is needed.
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