PPI Interest Tax Reclaim

super_saver123

Hello,

This is more a word of warning than anything else. I saw that I could claim back the tax on my PPI, so I immediately put in a claim online.

However, it backfired somewhat as the interest gained on my PPI amount pushed me into a higher tax band & I now owe HMRC for underpaid tax.

It’s not a huge amount so I’m not too concerned, but it’s just something to be aware of.

Nasqueron

Did you only claim the tax back on the INTEREST element of the PPI refund as that is all that is taxed rather than the whole of the PPI refund (which is not)

super_saver123

I did claim back the tax on the interest part only. The interest made up almost half of my claim as it dated back more than 20 years.

Calvq

I got a similar question, got ppi refund of approx four thousand, but I only work part time so just under tax limit. Got no savings in my own name. Was going to do the tax refund form then panicked that it the four thousand topi refs would be added to my earnings for the year and make me pay tax on my salary

Dazed_and_confused

You aren't liable to tax on the PPI refund itself, it's just the interest element.

And if you aren't paying tax on your wage you are probably going to find the interest is taxable at the savings starter rate of tax. Which has been 0% for the past few tax years.

Overall you are highly likely to be due a tax refund.