Martin Lewis: Three must-dos by 5 April

There's just weeks left to submit claims potentially worth £100s on everything from incorrect tax codes to uniform tax rebates. With all of these you can only reclaim for the past four tax years, so you need to act now for the 2017/18 financial year, warns MoneySavingExpert.com founder Martin Lewis during the final episode of The Martin Lewis Money Show Live. Here's all you need to know.

Read the full story here:
'Martin Lewis: Three must-dos by 5 April 1) Tax code rebate 2) Marriage tax allowance 3) PPI tax back'

Click reply below to discuss. If you haven’t already, join the forum to reply.

Comments

  • Wouldn't this be better in the Work, Benefits & Business sub given that has a sub specifically for tax rebates etc?

    I get the PPI tax angle but this forum isn't used very much so people might miss it
  • Andyaero
    Andyaero Posts: 20 Forumite
    First Anniversary First Post
    Regarding the PPI tax back element of this, 2 years ago I received a substantial payout from various banks in PPI settlement. As the interest part of the payout was reduced by 20%, but I was and still am a 40% rate payer, is it in my interests to try and claim the tax back or will they send me a charge for the additional 20%?
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 13,345 Forumite
    First Anniversary First Post Name Dropper
    edited 14 March 2022 at 10:48PM
    Andyaero said:
    Regarding the PPI tax back element of this, 2 years ago I received a substantial payout from various banks in PPI settlement. As the interest part of the payout was reduced by 20%, but I was and still am a 40% rate payer, is it in my interests to try and claim the tax back or will they send me a charge for the additional 20%?
    Impossible to say without full details.

    It's possible that you could be due a refund as £500 of any interest would be taxable at 0%.  

    But you may well owe some additional tax irrespective of this.  Which you should really be advising HMRC of yourself.
  • Andyaero
    Andyaero Posts: 20 Forumite
    First Anniversary First Post
    At the time I don't recall being given any advice that the 8% interest payment that was reduced by 20%, should have been reduced by 40% if I was a higher rate payer. Is that the case?
    Or would the tax % relate to the time PPI was overpaid rather than when it was paid back to me. In which case I would have been a 20% payer.
  • Andyaero said:
    At the time I don't recall being given any advice that the 8% interest payment that was reduced by 20%, should have been reduced by 40% if I was a higher rate payer. Is that the case?
    Or would the tax % relate to the time PPI was overpaid rather than when it was paid back to me. In which case I would have been a 20% payer.
    The company making the PPI refund was obliged to deduct 20% (basic rate) tax from the taxable interest element of the refund.

    It is then down to individuals to sort their personal tax position, whether that be getting a refund or paying any extra tax due.

    The interest is taxable in the tax year it was paid in, not spread over however many years it is paid in respect of.
  • Andyaero
    Andyaero Posts: 20 Forumite
    First Anniversary First Post
    Sorry, but to clarify then.....as a 40% tax payer, am I due to pay 40% on the 8% interest amount of the payout?
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 13,345 Forumite
    First Anniversary First Post Name Dropper
    edited 15 March 2022 at 12:07AM
    Sort of.

    The first £500 of any interest is taxed at 0% so the effective tax rate will be slightly less.

    Let's say you have interest of £1,000

    £500 x 0% = £0.00
    £500 x 40% = £200.00
    Total tax due = £200.00
    Effective rate is 20%

    Or interest of £3,000

    £500 x 0% = £0.00
    £2,500 x 40% = £1,00.00
    Total tax due = £1,000.00
    Effective rate is 33.3%
  • Andyaero
    Andyaero Posts: 20 Forumite
    First Anniversary First Post
    Thanks, perhaps I'll leave the past in the past.......
  • Thanks Martin.  Gave them a call, although took 50 minutes, and changed my code.  I took part time retirement and had a double pension payment on my 1st one.  That flagged I would be 50% tax payer with the pay I received in January, a particularly high one as the next month I had no commission, so deleted my tax code allowance!
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