Help - PPI Tax Reclaim

sonic69

Hello,
I recently submitted an online claim for 2016 - 2017 and have now had a letter from HMRC saying that I owe them £452.60 so really need some advice please.
I was a higher-rate tax payer in 2016-2017 and completed the form as per the guidance putting the Statutory Interest on the PPI in box 3 which was £3,245.58 and the tax taken off the Statutory Interest in box 3.1 which was £649.11
I don't have any other savings accounts so thought it would be fairly straightforward.
I have since called HMRC to query their calculation but didn't get anywhere, only that I should write to them detailing everything and provide a copy of the PPI payment details, I don't have a paper copy of these but have requested a copy from Lloyds, but am yet to receive this.
Can anyone provide any help or assistance as I don't know what has gone wrong with this, did I fill the form out incorrectly or have HMRC got the calculation wrong.
Many Thanks.

[Deleted User]

The calculation seems correct.

 You can earn up to £500 in interest before tax as a higher rate tax payer, so owe them tax on £2,745, less the £649 already paid.

Dazed_and_C0nfused

I think you're wasting everyone's time if you query this.  

You should have had £500 interest taxed at 0% plus £2,745 taxed at 40%.  So total tax owed is £449 more than you paid.  Plus a bit that most people owe but HMRC usually ignore unless someone makes a claim.

So £452 looks spot on.

sonic69

Thanks for the reply, I clearly don't understand this and never thought I could end up owing more as a result of making a PPI tax claim as there doesn't seem to be any warnings that this can happen, only that if you've had a PPI payout that you should claim for the 20% that was removed at source and depending on your tax bracket can be up to £500 for higher-rate tax or £1000 for basic rate. 

Dazed_and_C0nfused

£500 of your interest is taxed at 0% (aka Personal Savings Allowance)
£2,745 of your interest is taxed at 40%

The total tax you need to pay on the interest is therefore £1,098.

You only paid £649 so you have extra to pay.

This is covered in the MSE blog and on gov.uk.

https://www.gov.uk/apply-tax-free-interest-on-savings