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Problem with R40 form being returned?

Loz01
Posts: 1,848 Forumite


I am trying to claim back the tax I paid when I was refunded a PPI payment. I filled in the R40 form online and have been sent a letter from HMRC saying "We need you to confirm the details of your income. Please send us the documentation which show details of your PPI claim, including the simple interest calculation from the tax year 2019 to 2020" - I understand the "send your PPI claim" part, but not the second part! Can anyone enlighten me on what this simple calculation is? I filled in the form as best I could and I'm not sure what they need, is it just a copy of the whole PPI claim/refund I got so they can see what tax I paid...? Thank you anyone in advance.
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Comments
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You get taxed ONLY on the interest element of the PPI refund. The interest on your PPI refund is 8% simple interest a year (simple means you get 8% on a fixed sum every year, it's different from compound which is interest which increased each year as year 2 interest is based on the sum + year 1 interest, year 3 is based on sum + year 1 + year 2 interest etc)
You should send them the breakdown provided by whoever refunded you which shows the interest amount plus the amount you were taxed1 -
I suspect you have tried to declare non taxable income (PPI refund) which is confusing HMRC.
An R40 is a simple tax return for you to declare all your taxable income. The only element of a PPI related refund is the statutory interest.
They need to know about that (and the tax deducted) not the non taxable element.
The easiest thing would be to send the breakdown then they can ignore what you have put and calculate any refund based on what they think is correct.1 -
Thank you very much, I will send the breakdown paperwork that I got when I got my original PPI refund. It's only £151 but still, money is money...!1
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