Tax Code Changed after reclaiming PPI Tax? I

Wifeycakes

Hi guys! Not sure if I need to panic or not but I filled in the R40 to hopefully claim back some tax paid on my successful PPI. The reclaim value would maybe be £350.

Anywho woke up to an email from HMRC saying my code had changed. Obviously suspicious me logged into my gateway and yep, there’s a notification saying it’s changed as of the 25th November.

My job, salary and benefits have been fairly stagnant for 5 years; no changes in circumstances, I’m on PAYE, only thing is the PPI claim. I was until this point on tax code 1138L and now on 1256L

Is this looking normal? Do I have to pay lots of monies to her majesty now ha ha. I’m concerned I’m gonna get a big bill just before chrimbo! Thank you

unholyangel

Wifeycakes wrote: »

Hi guys! Not sure if I need to panic or not but I filled in the R40 to hopefully claim back some tax paid on my successful PPI. The reclaim value would maybe be £350.

Anywho woke up to an email from HMRC saying my code had changed. Obviously suspicious me logged into my gateway and yep, there’s a notification saying it’s changed as of the 25th November.

My job, salary and benefits have been fairly stagnant for 5 years; no changes in circumstances, I’m on PAYE, only thing is the PPI claim. I was until this point on tax code 1138L and now on 1256L

Is this looking normal? Do I have to pay lots of monies to her majesty now ha ha. I’m concerned I’m gonna get a big bill just before chrimbo! Thank you

Was your PPI claim for a previous tax year or a current year?

Also, how did you arrive at your figure of £350? Generally (one or two exceptions) the maximum you can reclaim from tax paid on interest is £200 due to the personal savings allowance (£1000 @ 20% or £500 @ 40%).

But a bigger tax code is better (unless its a K code). It means you can earn more before you're liable to tax. I can't say why its changed, could be for quite a few reasons. Do you still have your old tax code notice for the 1138 code?

Dazed_and_confused

I was until this point on tax code 1138L and now on 1256L

Obviously only you can tell us the make up of your tax codes but it's possible that 1138L included some tax you owed.

Assuming your R40 was for the 2018:19 (or earlier) tax year HMRC may have recalculated your tax liability for that year and you no longer owe any tax.

And your 2019:20 tax code has been amended to remove the tax owed.

As such you can expect a P800 calculation(s) in the post shortly. You may not be due a "refund" of £350 from HMRC, it might be a part refund from HMRC and a reduction in the tax you need to pay in the current tax year as a result of no longer having any tax underpayment in your tax code.

Your tax code may now be made up the Personal Allowance plus job expenses (£12,500 + £60 = £12,560 = tax code 1256L.

Perhaps you could explain why you think you will have overpaid £350 from the PPI interest as that is more than most people are usually entitled to (assuming £350 or more tax was deducted by the PPI company).