PPI Tax Refund

shaz1000

I've finally got my tax back on my PPI payment. I just wanted to clarify something. I was taxed for the amount of £352 on my PPI. refund. But I've only received 181.89 back from the tax office. The tax office has included the compensatory interest of the PPI as part of my annual income. Is that correct?  

Dazed_and_C0nfused

If it wasn't part of your annual income why would tax have been deducted in the first place?

Most people get no more than £200 back.  Often less if you have normal untaxed interest from savings.

Why do you think £181 may be wrong?

shaz1000

Martin said that PPI payments were taxed and they weren't meant to be and could be claimed back.That is what I have done.

Arnisdale

shaz1000 said:

Martin said that PPI payments were taxed and they weren't meant to be and could be claimed back.That is what I have done.

Do you have a link to where you saw him state that?

Dazed_and_C0nfused

shaz1000 said:

Martin said that PPI payments were taxed and they weren't meant to be and could be claimed back.That is what I have done.

Pretty sure Martin Lewis has never said that as PPI refunds aren't taxable and do not have tax deducted from them.

He may well have said interest paid alongside PPI refunds is taxed and some people can get some (or all) of the tax back.

Do you have any other reason to think the refund you have received is wrong?

shaz1000

Because the amount that Halifax deducted from the interest on the PPI refund was £352 and the Inland Revenue only refunded me £181. So should I be asking for the difference from the halifax as they shouldn't have taxed it at all.

Dazed_and_C0nfused

Why on earth do you think they shouldn't have taxed it?

The statutory interest paid alongside PPI refunds is taxable income.

Depending on their personal circumstances some people are able to get a refund of some or all of the tax deducted.

Your refund suggests that in the tax year in question you,
A.  Earned (taxable wages) more £17,500
B.  Had a small amount of untaxed interest from banks, building societies or other interest payers.

shaz1000

That's the reason I've posted to try and get some answers.

Dazed_and_C0nfused

I don't know why you think the statutory interest isn't taxable.

It is and some people are due a refund.  Of some of the tax.  Not necessarily all of it.

Have you got a valid reason to think your refund is wrong?  

Maybe a link to some guidance/information that supports your view?

Arnisdale

shaz1000 said:

That's the reason I've posted to try and get some answers.

Answer my question please.

[Deleted User]

Arnisdale said:

shaz1000 said:

Martin said that PPI payments were taxed and they weren't meant to be and could be claimed back.That is what I have done.

Do you have a link to where you saw him state that?

Martin regularly talks about stuff like this on TV, it's not unlikely he would have provided a simplified response along the lines of "if you were paid a PPI refund you may be due a tax refund" - he could have made it clearer, I don't know, I don't watch his shows. OP might have assumed that he meant there was a tax refund on the whole PPI payout because they didn't follow the story fully or caught the end of it or whatever.
https://blog.moneysavingexpert.com/2019/04/martin-lewis--had-a-ppi-payout---if-so-you-can-reclaim-the-tax-o/