Please Help - PPI Tax Reclaim Query

Verisimilitude

I learnt about this from the Martin Lewis Show, which helped my mother make a claim (she is long since retired). She was able to get three additional PPI payouts. Having now learnt about the tax reclaim you can also do, I've tried to help her complete an R40 form (by post). Unfortunately, the form was returned and I must be doing it incorrectly. What I'd really appreciate is if someone can help clarify a few things for me?
Tax Year - is this when you initially made the claim or when it was paid out?
2.3 - State pension - for the year - (calculated this to be £7924.80)
However, these are the bits I'm really stuck with...
3.1 Net interest paid by...PPI payments - after tax taken off
3.2 - Tax taken off
3.3 - Gross amount before tax taken off
I'm attaching scans of the breakdowns we have for each PPI payout. There were three, the first was £2,129.84 (don't have a breakdown certificate for this as was some time ago and initially thought it would be the only one), the second was for £6,457.75 (attached) and the final one was for £4,968.36 (attached).
Those three sections under section 3 are literally the only things I need to fill out for her, as none of the remaining form applies to her personal situation. I've tried to work it out but what with the payments being split in three parts, plus I thought the part I could reclaim for her was the 8% statutory tax charge but on one breakdown form it says 8%/15%. I really thought this would be straightforward but it's probably just me.
Thanks in advance!

[Deleted User]

You declare the interest (only, not the whole PPI refund) as income and you're claiming back the taxed bit 

PPI interest is 8% simple for the most part but before a certain year you get 15% to reflect the higher interest rates of the time

The problem here is that you probably owe tax given the amount of interest you have earned in that year

Dazed_and_C0nfused

Unfortunately I don't thing you are going to be able to use the R40 as the (taxable interest) amount involved clearly exceed £10,000 in a single tax year.

Unless the payments were made in different tax years in which case you will need to complete multiple R40's, one for each tax year interest was paid in.

If there was more than £10,000 interest paid in a single tax year I suggest you check with HMRC if an R40 will actually be accepted in this situation as normally they would want a Self Assessment return completing.

It also appears that this is well worth you persevering as there could be a substantial refund due, even if all the interest was paid in a single tax year, however some of your other comments are a bit odd.  

If you don't know which tax year is involved how can you possibly have calculated the amount of State Pension?
NB.  The R40 is completed for the tax year the interest was paid by the PPI company.

Tax Year - is this when you initially made the claim or when it was paid out?

2.3 - State pension - for the year - (calculated this to be £7924.80)

fionamary1

For the tax year 20/21 the interest earned from savings and the interest refunded from a PPI refund will total less than my PSA of 1k.I intend to complete an R40 form to claim back the tax on the refunded element of PPI.My query/confusion is on the R40 under section 3,should the figures show the Total ammount, ie savings interest+PPI refund,or just the PPI element.

Dazed_and_C0nfused

Savings interest should not have tax deducted in 2020:21 so that would go in the untaxed interest section

PPI related interest is taxed at source by the company making the PPI refund so that would go in the taxed interest section.

fionamary1

Many thanks for speedy reply.As I am knocking on in years,just to clarify,sections 3.1/3.2/3.3 refer to the PPI element only. Section 3.4 is total of all other (untaxed ) interest,and 3.2 + 3.4 should not exceed PSA of 1K for total refund.

Dazed_and_C0nfused

If the only taxed interest was the PPI related amount (which is normal these days) then yes that is all that goes in the taxed boxes and everything else* goes in the untaxed box.

Lots of people are unable to benefit from the savings nil rate of tax (aka Personal Savings Allowance) as you have to use both the Personal Allowance and the savings starter rate of tax (upto £5,000 taxed at 0%) before the savings nil rate can be used.

Basically if your total taxable income is less than £18,500 in the 2020:21 tax year you don't actually need to pay tax on interest.

If it is more than that a full refund may not be due, you would need to post some figures for me to check.

*only taxable amounts, not ISA interest or any other non taxable interest.