PPI Tax Refund for 2016 Claim

Dee_100

Hi,
My dad is 72 years old and received 2 PPI Claim refunds back in September and October 2016. I'm looking at the information needed to complete the PPI tax refund but I am not sure what information he needs to have to hand before completing the R40 form. The guidance notes have confused me more then actually helped. My dad receives a state pension and a private pension and was receiving both when the claim was awarded in 2016 as he was retired. Would I be correct in assuming he needs to have the following information before completing the R40 form:

1. Interest and tax paid on his bank savings at the end of the year December 2016 (For his joint account with my mum he should only include his share of tax / interest?)
2. Any tax paid on his state pension / private pension at the end of the 2016 / 2017 financial year?
Apart from the above two things and details of his PPI claim, will he need any other information to hand before completing the R40 form.
Apologies if these questions have already been answered in other threads.
Thanks in advance.

Dazed_and_C0nfused

1.  If that is his only normal (non ISA) account paying interest then yes although there shouldn't be any tax deducted in December 2016.  And yes 50% of the interest.

2.  Yes but you also need to declare the pension income, not just the tax.  The tax would only be deducted from his private pension, it is never deducted from the State Pension.  He should have a P60 for the private pension and a statement from DWP showing the State Pension to be paid that tax year.

You do realise the PPI refund isn't taxable and does not have tax deducted from it?  He needs to declare the statutory interest paid alongside the PPI refund and the tax deducted from the statutory interest.

Dee_100

@Dazed_and_C0nfused Many thanks for the information above. I did read online that you can only claim back the tax for the statutory interest so that is fine.

Dee_100

Please can someone help - The R40 guidance notes really do not make things easier.
Am I right in thinking that each section needs completing as follows:
2.1 - Leave blank as my dad is retired
2.2 - Leave blank as my dad is retired
2.3 - Yearly amount from state pension only
2.4 - Leave blank as my dad receives state pension
2.5 - Leave blank as my dad is not receiving any benefits
2.7 - Yearly private work pension gross amount only
3.1 - Yearly interest paid by all bank savings and the PPI interest (For the PPI payment this is the figure against "statutory Compensation").
3.2 - The "Income Tax Deduction" amount on the PPI payment only.
3.3 - Is this the gross amount my dad had in bank savings at the end of 2016 and the gross amount of the PPI payout added together? Or just the gross amount of the PPI payment?

Dazed_and_C0nfused

2.1 - Leave blank as my dad is retired

That, and a lot of your other suggestions may not be correct as it is the position in the tax year the R40 is being completed for that matters, not what the situation is today.

3.1 is wrong, that box would normally just be the net amount of the PPI related interest as tax was no longer deducted by banks and building societies after 5 April 2016.

3.2 correct

3.3 is wrong.  This is the gross amount of the PPI related interest i.e. 3.1 plus 3.2

3.3 Is this the gross amount my dad had in bank savings at the end of 2016 and the gross amount of the PPI payout added together? Or just the gross amount of the PPI payment?

Neither of those figures are required.  He does not need to tell HMRC how much he had in the bank and does not need to tell them about the PPI payout.  PPI refunds are not taxable and do not have tax deducted, it is just the statutory interest that is taxable and had tax deducted.

Normal (non ISA) interest goes in box 3.4.

Anvil1

You need to get your claim to HMRC by 5 April 2021 , as the 16-17 tax year is almost out
of date for any claims, they only go back four years 

Dee_100

Thanks both. So these are the PPI payment details for both payments my dad received for 2016/2017.

PPI Claim One
Refund Payments for PPI Cover - £911.12
Refund of Interest charged on PPI premiums and Fees - £1482.47
Statutory Compensation - £2050.68
Refund of Fees incurred due to PPI - £424.00
Income Tax Deduction - £410.13

PPI Claim Two

Refund Payments for PPI Cover - £1215.87
Refund of Interest charged on PPI premiums and Fees - £4162.06
Statutory Compensation - £2370.84
Refund of Fees incurred due to PPI - £60.00
Income Tax Deduction - £474.16

So therefore:
3.1 = Statutory Compensation - Income Tax Deduction = £3537.23
3.2 = £410.13 + £474.16 = £884.29
3.3 = £3537.23 + £884.29 = £4421.52