PPI Tax

gazone_uk

Can someone help my wife and I received a refund of PPI from the Clydesdale bank on may 2017 for mis sold PPI from the period of 1995 to 2001. I received gross  £9296.97 missus tax of  £1036.91 . My wife received £7389.02  gross missus £824.84 tax. I have now put in for to claim the tax from this and as I haven't heard anything i put through a complaint. The complaint handler is now saying I owe over £800 tax as I didn't pay 20% tax on my claim. I believe this to be wrong and have spoken to her again and she has said she will check again that the tax might be different then.  My wife paid little tax then and received a cheque for £67 this cant be right. and the bank cant be wrong. I think this complaint handler is familiar with PPi Can someone help. Thanks Gary

brettcta

Who does the complaint handler work for, Clydesdale or do you mean a claims management company complaint handler?

Clydesdale would have deducted 20% tax at source from the compensatory interest amount. It should be outlined in the appendix sent to you with your final response letter and if HMRC are disputing this, you should provide this to them as evidence that Clydesdale have already deducted tax.

what I suspect has happened, however, is that you’ve made a balls up completing the R40 and put in the wrong figures, especially if HMRC are requesting more money from you.

what did you input on the R40?

Dazed_and_C0nfused

I think you have got very confused and are highly likely to have, in reality, complained to HMRC about the fact that you have made a pig's ear of completing the R40's.

PPI refunds are not taxable and do not have tax deducted from them.

The statutory interest paid alongside the PPI refund is taxable and does have tax deducted from it.

What exactly did you enter on the R40?

I suspect you have declared non taxable income on the R40 and are unhappy about the fact that HMRC have accepted what you have told them.

It is probably very easy to resolve and the best starting point would be for you to outline what you declared on your own R40.

Arthurarthur52

I messed up our tax claim. Hmrc were helpful and went from owing £3k to a £2k refund as hubby was not working. 

gazone_uk

Thanks seem like Hmrc have sorted it now. 

Dbanks99

My mother was taxed just over £600 on a PPI refund, despite being a pensioner. Is this correct or can she reclaim it 

[Deleted User]

Dbanks99 said:

My mother was taxed just over £600 on a PPI refund, despite being a pensioner. Is this correct or can she reclaim it 

Everyone is taxed on the interest element of the PPI refund, NOT the PPI refund
Yes you can ask HMRC to refund some/all of it via form R40

Dazed_and_C0nfused

Dbanks99 said:

My mother was taxed just over £600 on a PPI refund, despite being a pensioner. Is this correct or can she reclaim it 

Being a pensioner had no relevance at all.

She may well be due a refund of some (or all) of the tax deducted but it depends what other taxable income she has in the same tax year.

If she doesn't already complete Self Assessment returns then she can use form R40 (like a simple tax return) to make the claim.  She only includes taxable income on the R40.  The PPI refund itself is not taxable and won't have had tax deducted from it.

MrsJKnox

My husband and I had successful PPI claims in April 2018-March 2019 tax year.  There were 5 claims in total amounting to just over £14k.  2 are in my name, 1 is in my husbands and the remaining 2 are from joint accounts.  My husband is in the higher tax bracket whereas I am in the standard bracket.  He is worried he will 'owe' money to HMRC if he puts in an R40 refund claim.  Should he think twice?  Also for the joint accounts, I believe I claim half and he claims half of the tax paid on the interest?  Finally, do I have to submit a form for each claim or can they be totaled under one form?

Dazed_and_C0nfused

You complete an R40 for each tax year.

So if the interest was all received in one tax year only one form will be needed (per person).

Do you mean you want to claim any refund due to you but your husband doesn't want to pay the additional tax he might owe 🤔

MrsJKnox

Dazed_and_C0nfused said:

You complete an R40 for each tax year.

So if the interest was all received in one tax year only one form will be needed (per person).

Do you mean you want to claim any refund due to you but your husband doesn't want to pay the additional tax he might owe 🤔

No obviously that would be illegal   He would be claiming his half of the joint claims plus the 1 that is solely in his name.  He has read a few comments about HMRC asking for more tax to be paid rather then issuing a refund.  I will be putting in my claim regardless on the 50% of our joint claim and the two in my name.  Hope that makes sense!