PPI tax refund

System

This discussion was created from comments split from: PPI TAX REFUND.

Mrs_Salford

It dropped on my doormat brown envelope on Wednesday 100424 after last date of being able to claim/putting it in - It was not businesslike and quite rude -  starting with they had worked out I had  not paid enough tax 2019-20 small amount  so not asking for it back but if I asked for them to show me the calculation I would have to pay this small amount back - obviously designed to put the fear of God in anyone I call it "PHSYCOLOGICAL INTIMIDATION' one of the tools and teqniques at their disposal I don't wonder why some of the public dont like them -however, if they did not want it back why would they put it in the letter - and how much is a small amount to them 100's 1000's even 1,000,000 - I am 72 yrs old but not frightened that easily and been in the business world a long time and still working- - then last paragraph - was that I had already claimed this tax back when they said done a calculation 311223  and repaid me the below amount on 050120 - which I did not claim and have never physically put a claim into HMRC -  they  just sent me a cheque for overpaid tax of £198.02p which I know was not true because PPI TAX  FROM COMPENSATORY INTEREST - refunds of it  WAS NOT KNOWN ABOUT AT THAT STAGE   I believe that its more of just a recent item. Lastly also it is not my job to estimate any of my Tax Codes , and if they don't do the calculations properly well I won't ever know if I owe them any small or large amounts , if they don't tell you -   but I have now sorted that out and gone back with them. A few years asking what I owe if anything - they have told me and I am in the process of reimbursing them with a cheque and its not come to anything near or over £100  so from now they won't be able to try that "PHSYCOLOGICAL INYIMIDATION" As each year now I will be giving them a ring to check how much I oweif any? 
Now after all of the above I have not got my £2192.62p back - can some one please tell me was the cheque I received of £198.02p possibly the correct amount of tax from my PPI REWARD back in 2019 or have I tried to claim somehow the wrong  tax which is the larger amount that has been taxed on my compensatory Interest because that's the figure that the HALIFAX  has written on my calculation when they sent it to me in Nov 2019  , it shows exactly the premiums I had paid  which I got back -  plus a big amount for Comensatory Interest -  also What I had used of it- The Gross Payment - Less Tax - which is figure I advise above - Thrn the Total Payment - Can someone tell me why I have not been successful  in getting back whst is rightfully mine - I really would appreciate the answer as I am very upset and anxious - that I heat lots of people have got theirs back. PLEASE HELP ME!
Yours Mrs Salford

Dazed_and_C0nfused

Most people who are basic rate payers would get ~£198 back.

A basic rate payer (including the statutory interest paid along side the PPI refund) would often have £1,000 of interest that gets taxed at 0%.  Anything above that would be liable to tax at 20%.  Which is the amount the company paying the interest would have deducted.

So that £1,000 taxed at 0% instead of 20% saves you £200.  But basic rate payers typically owe £2 each tax year due to how PAYE tax codes work.

And that £2 is taken into account when HMRC calculate your tax liability for the purposes of issuing any refund.  £200 less £2 = £198.

Mrs_Salford

Hiya - Mrs salford hear again   - thank you for your response , I am looking for the £2192.62p - don't I get that back? Or have I misunderstood as I got back £17000+ and came out with Net £15000+ the payments I had returned were £7000 and compensatory interest £10000+ that is where I gained this INTEREST - That is what I was claiming  back not the  £198 as I may now have thought incorrectly that they could not tax that particular  interest on  I take it this is my misunderstanding or can I claim and of that back?
Yours Mrs Salford

Dazed_and_C0nfused

Mrs_Salford said:

Hiya - Mrs salford hear again   - thank you for your response , I am looking for the £2192.62p - don't I get that back? Or have I misunderstood as I got back £17000+ and came out with Net £15000+ the payments I had returned were £7000 and compensatory interest £10000+ that is where I gained this INTEREST - That is what I was claiming  back not the  £198 as I may now have thought incorrectly that they could not tax that particular  interest on  I take it this is my misunderstanding or can I claim and of that back?
Yours Mrs Salford

The PPI refund isn't taxable and did not have tax deducted.

The statutory interest is taxable and usually has 20% tax deducted.

The interest is just normal taxable income and your tax position will have been recalculated to include the extra income you received and the tax deducted.

Some people getting £10k extra income would owe more than the 20% deducted at source, some would get the whole £2,192.62 back.

The fact that you got £198 indicates you were a basic rate payer in that year from your other taxable income.