PPI Payment Tax take

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

Comments

  • 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.
Meet your Ambassadors

Categories

  • All Categories
  • 341.6K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.7K Work, Benefits & Business
  • 605.7K Mortgages, Homes & Bills
  • 172.4K Life & Family
  • 246.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards