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

Dazed_and_C0nfused

akamai said:

thenumptee said:

Hi all and thanks in advance for any help.

I am having big problems trying to get the tax back on the interest paid on some PPI claims in 2020/2021 tax year.

I completed the form R40 online in June and received a reply in September saying they were returning the form and I needed to send them the documents which detail the PPI claims. Anyway, I rang HMRC to explain that I hadn't received the form R40 back and it was probably because I'd completed it online. They recommended waiting a while for the form to be sent back separately but if it didn't arrive to just enclose a covering letter.

I finally posted the documents including the covering letter to HMRC on Oct 11th by 1st class recorded delivery. Royal Mail's tracking says it's still with them but knowing that this is flaky at best I have been trying to get hold of someone at HMRC to see if the letter was received. This has proved impossible so far. I have been holding on the line for nearly half an hour before having to give up and today I finally got through to someone but they didn't seem to know anything about anything. I was in the middle of asking if he could see my claim in front of him and he hung up on me.

I'm at my wits end and guess this is more of a rant than a plea for help but I just don't know what to do next.

Should I wait? Should I try sending the PPI documents again?
Should I just complete the paper version of form R40 and enclose the PPI documents with it?
Should I just give up?

HI, I'm in the same boat, applied by letter (as couldn't submit it on the R40) in April 2022, and despite ringing every six weeks, I am getting nowhere, although I know it has been received and passed to 'Technical Team', I haven't heard from them about why it is taking so long, did received an apology last week from the lady that took my call, saying it 'really shouldn't have taken this long', but have yet to hear back form anyone.

If your'e like a lot of posters on here the problem may well be how you completed the R40 form in the first place.

SteveSam

I completed my R40 online and was issued a reference number of which I took note .
After 5 months or so the reference number disappeared from my online HMRC account. I contacted the helpline who were able to retrieve my R40 with the reference and assure me that it was correctly filled in and that it was with the technical team. 
After another couple of months I was given the same assurance.
After 9 months I finally received a cheque in the post.
Conclusion drawn from this: massive under-staffing and complexity of checking procedures
The form itself I am sure is designed to be unnecessarily hard to fathom.

thenumptee

thenumptee said:

Hi all and thanks in advance for any help.

I am having big problems trying to get the tax back on the interest paid on some PPI claims in 2020/2021 tax year.

I completed the form R40 online in June and received a reply in September saying they were returning the form and I needed to send them the documents which detail the PPI claims. Anyway, I rang HMRC to explain that I hadn't received the form R40 back and it was probably because I'd completed it online. They recommended waiting a while for the form to be sent back separately but if it didn't arrive to just enclose a covering letter.

I finally posted the documents including the covering letter to HMRC on Oct 11th by 1st class recorded delivery. Royal Mail's tracking says it's still with them but knowing that this is flaky at best I have been trying to get hold of someone at HMRC to see if the letter was received. This has proved impossible so far. I have been holding on the line for nearly half an hour before having to give up and today I finally got through to someone but they didn't seem to know anything about anything. I was in the middle of asking if he could see my claim in front of him and he hung up on me.

I'm at my wits end and guess this is more of a rant than a plea for help but I just don't know what to do next.

Should I wait? Should I try sending the PPI documents again?
Should I just complete the paper version of form R40 and enclose the PPI documents with it?
Should I just give up?

An update following on from my earlier rant above.

Out of the blue today, I received a cheque from the HMRC!

So it would appear that the person I spoke to was wrong (shock) and I can finally put a tick in the win column 😊👍

Good luck and keep the faith to all those still persisting.

Amandaa5449

I had a payout September 2020 of £1,053 from a car finance company.

am I eligible to apply for PPI tax refund? 

Dazed_and_C0nfused

Amandaa5449 said:

I had a payout September 2020 of £1,053 from a car finance company.

am I eligible to apply for PPI tax refund? 

Maybe, maybe not.

PPI refunds aren't taxable and don't have tax deducted from them.

The statutory interest paid alongside the PPI refund is taxable income and does have tax deducted.

How much was the interest and tax deducted?

Did you complete a Self Assessment return for 2020:21?

If not roughly what was the total of your taxable income in 2020:21?

Amandaa5449

Dazed_and_C0nfused said:

Amandaa5449 said:

I had a payout September 2020 of £1,053 from a car finance company.

am I eligible to apply for PPI tax refund? 

Maybe, maybe not.

PPI refunds aren't taxable and don't have tax deducted from them.

The statutory interest paid alongside the PPI refund is taxable income and does have tax deducted.

How much was the interest and tax deducted?

Did you complete a Self Assessment return for 2020:21?

If not roughly what was the total of your taxable income in 2020:21?

No not completed a self assessment return. 

I don’t work I’m on state benefits 

I find all this very confusing 😕

Dazed_and_C0nfused

Amandaa5449 said:

Dazed_and_C0nfused said:

Amandaa5449 said:

I had a payout September 2020 of £1,053 from a car finance company.

am I eligible to apply for PPI tax refund? 

Maybe, maybe not.

PPI refunds aren't taxable and don't have tax deducted from them.

The statutory interest paid alongside the PPI refund is taxable income and does have tax deducted.

How much was the interest and tax deducted?

Did you complete a Self Assessment return for 2020:21?

If not roughly what was the total of your taxable income in 2020:21?

No not completed a self assessment return. 

I don’t work I’m on state benefits 

I find all this very confusing 😕

In which case you are highly likely to be due a refund of any tax deducted.

You just need to complete form R40 for the 2020:21 tax year with details of all your taxable income on it.

Remember the actual PPI refund is not taxable and should not be entered on the R40.

You will need the letter/explanation you got from whoever made the PPI payout to find details of the interest.

ctennant26008

Hi,  I've recently progressed a tax claim on PPI payment but instead of receiving a rebate as expected HMRC have sent me a bill for tax on 'savings income' which is stated as the full value of the PPI payment. Is this correct as i thought it was only the interest part of the payment that could be classed as income. Obviously this is somewhat of a shock as i was expecting a refund and haven't got spare cash to pay the bill. Can you advise if i can challenge this? Thanks

Dazed_and_C0nfused

ctennant26008 said:

Hi,  I've recently progressed a tax claim on PPI payment but instead of receiving a rebate as expected HMRC have sent me a bill for tax on 'savings income' which is stated as the full value of the PPI payment. Is this correct as i thought it was only the interest part of the payment that could be classed as income. Obviously this is somewhat of a shock as i was expecting a refund and haven't got spare cash to pay the bill. Can you advise if i can challenge this? Thanks

Did you complete an R40?

If so what did you include on it in respect of either the untaxed or taxed interest sections?

redshift1961

I applied for a PPI Tax refund (using a company to do the donkey work) via a R40 but have received a letter from HMRC stating that they cannot accept the form as I pay tax under self assessment.

I received the payout in the tax year 2019/20.

They have advised that I now need to write to them and to include a substantial list of details, which include: -
why you think you have paid too much tax
Is there any template for such a letter or does anyone have wording that they used that they'd share?