PPI Payment Tax take 26 August 2021 at 8:04PM in Reclaim PPI & other insurance 1 reply 93 views

Richmmm

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

Dazed_and_C0nfused

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.