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PPI Payment Tax take

Richmmm
Posts: 18 Forumite

We had a PPI payment last tax year. It said thay had paid £640 ish in tax. So I submitted a claim and we have just had a tax calculation back from HMRC. They have classed the PPI payment as Savings income in the income coloumn.
I was expecting to get the whole £640 back, as i thought you could earn upto £1000 from savings interest in a year.. As a result HMRC say they only owe us £200 instead of £640.
Have I got this wrong?
Rich
0
Comments
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Yes you do seem to have got it wrong.
Most people can earn £1,000 in interest before paying tax on it.
You earned £3,200. Which was probably due to be taxed as follows,
£1,000 x 0% = £0
£2,200 x 20% = £440
Total tax owed = £440
Tax already deducted £640
Refund now due £200
£200 is more than most people will get back as you usually owe a small bit on PAYE so only get say £198.0
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