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  • FIRST POST
    • MSE Eesha
    • By MSE Eesha 8th Apr 19, 8:22 AM
    • 119Posts
    • 29Thanks
    MSE Eesha
    Martin Lewis: Had a PPI payout? If so, you can reclaim the tax on it
    • #1
    • 8th Apr 19, 8:22 AM
    Martin Lewis: Had a PPI payout? If so, you can reclaim the tax on it 8th Apr 19 at 8:22 AM
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





    Please click 'post reply' to discuss below.
Page 3
    • Dazed and confused
    • By Dazed and confused 2nd May 19, 6:14 AM
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    Dazed and confused
    Hi
    Hope someone can help regarding claiming tax back on a successful PPI claim back in 2016 via R40 form. The following successful claim is outlined below
    Total refund was 6423.75
    Gross interest at FOS rate 1920.25
    Less tax 20% 384.05
    Stay Interest at FOS rate 0
    Net Interest 1536.20
    Total offer 7959.95
    I am a basic tax payer at 20% and have hadn’t any interest on savings am I eligible to claim based on above info? Also what figures do I need to enter on the R40 form for the UK interest section?
    Any help appreciated.

    Cheer
    Si
    The figures needed for the R40 are,

    Gross interest at FOS rate 1920.25
    Less tax 20% 384.05
    Net Interest 1536.20

    As you haven't said what tax year you received the interest in or what your other taxable income is its impossible to know what refund you may be due back.

    But as you are a basic rate payer then it could be something like this,

    2015:16
    It may be nothing but could equally be the full 384 if you didn't pay much basic rate tax i.e. the savings starter rate of tax (0% in 2015:16) is available to you.

    2016:17
    You are likely to be due best part of 200 back, courtesy of the savings nil rate of tax (aka Personal Savings Allowance) but could be due the full 384 back if you didn't pay much basic rate tax and can use the savings starter rate of tax (also 0% in 2016:17).

    This all assumes your tax affairs are otherwise upto date i.e. you don't want we any tax for other reasons, and you genuinely didn't have any other taxable savings interest, this is particularly relevant if your claim is for 2016:17.
    • sharkusmarkus
    • By sharkusmarkus 3rd May 19, 5:39 PM
    • 3 Posts
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    sharkusmarkus
    I've literally just got my paperwork indicating I have a payout coming.

    I noticed the 20% tax deducted, and was wondering if I could claim it back, hence looking at this article / forum post.

    The question I have is that I've been non-resident in the UK for 16 years, I've been living and working in Canada, so would I just use Form R43, and if so, which section(s) would be relevant?
    • Dazed and confused
    • By Dazed and confused 3rd May 19, 8:04 PM
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    Dazed and confused
    All sections relevant to you would the ones you need to complete.
    • sallyport3
    • By sallyport3 4th May 19, 9:50 AM
    • 1 Posts
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    sallyport3
    Success !!
    Hi Martin and team. I read your information about tax payed on PPI payouts. I filled in the form R40 as you suggested and added the same additional comment that you suggested. I am no spring chicken and although I can find my way around a computer, I am no genius (nor do I know much about income tax). I found it pretty easy and it took about half an hour. That was just short of 3 weeks ago and today I have received a cheque for 590.10. Thank you very much.
    • sharkusmarkus
    • By sharkusmarkus 6th May 19, 1:09 PM
    • 3 Posts
    • 0 Thanks
    sharkusmarkus
    All sections relevant to you would the ones you need to complete.
    Originally posted by Dazed and confused
    So form 43 then? There's no online version? I'll download and have a look around and see if I can figure it out. Thanks
    • jeffkey1
    • By jeffkey1 28th May 19, 10:04 PM
    • 32 Posts
    • 10 Thanks
    jeffkey1
    Fed up with PPI
    Hi Martin,
    I have only had one interest free loan on a sofa in the last ten years. I read the small print and declined ppi. So can I claim? A call from a ppi chaser said claim for anything, the banks never check !!! This is fraud. I realise people can be misled or don't read the small print but enough already. Let it rest.
    P.S I don't use Facebook either so stop prompting me to log in with it.
    • sgr1234
    • By sgr1234 31st May 19, 11:57 AM
    • 25 Posts
    • 2 Thanks
    sgr1234
    My husband and I have had 7 payouts this month from joint loans. If we want to claim the tax back on the statutory interest, do we have to wait until the end of the tax year to do so as we have to declare our total income and tax paid for that year? We have no savings whatsoever so presume we will get the full 20% tax back. His annual income is around 19000 and mine is 36000.
    • Dazed and confused
    • By Dazed and confused 31st May 19, 12:09 PM
    • 4,899 Posts
    • 2,554 Thanks
    Dazed and confused
    We have no savings whatsoever so presume we will get the full 20% tax back. His annual income is around 19000 and mine is 36000.
    Without knowing how much interest (the gross amount before tax) you each received its impossible to say however if the "annual income" is in respect of a job or business you run then all your interest will be liable to tax but the first 1,000 would be taxed at 0%.

    So maximum refund (assuming you had enough taxed interest) would be 200. Each.
    • sgr1234
    • By sgr1234 31st May 19, 12:15 PM
    • 25 Posts
    • 2 Thanks
    sgr1234
    Thanks D&C. Do we have to wait until the year end before trying to claim the tax back?
    • Dazed and confused
    • By Dazed and confused 31st May 19, 12:17 PM
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    • 2,554 Thanks
    Dazed and confused
    I think so yes. If you are employed and don't already file Self Assessment returns then you can use the R40 form Martin Lewis refers to in his article.

    If you file Self Assessment returns you just include the interest on that as normal.
    • javajim
    • By javajim 2nd Jun 19, 8:04 AM
    • 145 Posts
    • 17 Thanks
    javajim
    Thanks Martin
    I didn't think I had paid PPI but thought why not give it a try. So I used Martins "Resolver"
    I applied at two banks.
    At one there was no payback, where as much to my surprise the second has contacted me saying I had a refund due to me of just over 1000!!
    Well pleased, thanks
    • pauline123
    • By pauline123 11th Jun 19, 1:43 PM
    • 10 Posts
    • 1 Thanks
    pauline123
    Reclaim tax paid on PPI.
    HI all, I put in for 3 different (Claim Tax Back) PPI Payments on the 16th of April 2019, for the tax year 2018-2019 , Got a reply on the 31st May 2019, saying they would look into this matter when they received my P60 for 18/19, and this was normally sometime between June and Oct???, and if anything owing would write and tell me.

    Well I got my P60 in April off my employer?? which is what i used to fill in the form - So why do they only receive P60 sometime between June and Oct ??

    anyway just thought i let you know how this process was going for me - will update as and when.
    • xpf
    • By xpf 11th Jun 19, 7:42 PM
    • 468 Posts
    • 1,073 Thanks
    xpf
    I received a PPI payout of 1769. This was calculated as:
    811 PPI Premium Redress
    1197 Taxable interest @ 8%
    with 239 tax deducted.

    This payout was late last year (2018/19 tax year) I am a basic rate tax payer and earn around 43k.

    I do not have any savings so have not earned any interest in that respect.

    I've applied to HMRC for a tax refund and been refused as apparently I have paid the correct amount in tax

    Are HMRC correct?
    • Dazed and confused
    • By Dazed and confused 11th Jun 19, 10:35 PM
    • 4,899 Posts
    • 2,554 Thanks
    Dazed and confused
    I received a PPI payout of 1769. This was calculated as:
    811 PPI Premium Redress
    1197 Taxable interest @ 8%
    with 239 tax deducted.

    This payout was late last year (2018/19 tax year) I am a basic rate tax payer and earn around 43k.

    I do not have any savings so have not earned any interest in that respect.

    I've applied to HMRC for a tax refund and been refused as apparently I have paid the correct amount in tax

    Are HMRC correct?
    Based on the information you have provided no.

    However your post suggests you may have inadvertently confused HMRC by mentioning things which are irrelevant.

    If we assume you have paid the correct amount of tax on your earnings and have no interest other than from the PPI payout then the interest would be taxed as follows,

    1,000 x 0% = 0.00
    197 x 20% = 39.40
    Tax deducted 239 less tax due 39.40 = refund due of 199.60.

    In reality you probably owe a couple of quid due to how PAYE works so you would expect an actual refund of around 197-198.

    What may have confused matters is you mentioning the PPI redress. How did you claim the repayment?

    If you completed an R40 what did you enter?

    Without knowing this it's impossible to say where the problem lies.
    • Robotphil
    • By Robotphil 12th Jun 19, 7:37 PM
    • 2 Posts
    • 0 Thanks
    Robotphil
    Tried reclaiming tax on R40, now owe over 800 to HMRC
    So following Martins advice I completed an R40 form to claim tax deducted from my PPI payout. Instead of receiving a payment from HMRC I got a letter telling me I owe 842.30 in unpaid tax. Not a happy bunny. Not being a tax expert could do with some help/advice.
    On the R40 details entered as follows, box 2.1 (total pay) 45999.95, box 2.2 (tax taken off) 7008.50. (From my P60)
    Box 3.1 (net interest from ppi payment) 3529.94,
    Box 3.2 (tax taken off) 882.49
    Box 3.3 (gross amount) 4412.43
    These were figures I got from the section 975 certificate provided by Lloyds for tax year to April 2018.
    I was expecting a 500 rebate but instead got a letter saying I owe 842.30.
    The letter gives various income & deductions for medical insurance & job expenses but the highlights are.
    Total taxable income 39083.
    Income tax due 8733.20
    Income tax paid 7890.90
    You owe HMRC 842.30.
    Help.
    • Dazed and confused
    • By Dazed and confused 12th Jun 19, 7:53 PM
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    Dazed and confused
    What made you think you were entitled to a 500 refund in the first place?
    • Robotphil
    • By Robotphil 12th Jun 19, 11:58 PM
    • 2 Posts
    • 0 Thanks
    Robotphil
    I thought that as a higher rate tax payer my tax free interest allowance was 500. I had been deducted 882.49 tax from the gross amount. 500 of this should have been tax free. Do you have any advice to offer please?
    • Dazed and confused
    • By Dazed and confused 13th Jun 19, 5:10 AM
    • 4,899 Posts
    • 2,554 Thanks
    Dazed and confused
    There is no "allowance" for savings interest.

    If you were already a higher rate payer then your 4,412 would be taxed as follows,

    500 x 0% (savings nil rate) = 0.00
    3,912 x 40% (savings higher rate) = 1564.80

    Total tax due = 1564.80
    Tax paid = 882.49
    Tax owed = 682.31

    Presumably the rest of the underpayment is to do with company benefits and expenses (your tax code may have included provisional amounts with the actual amounts being slightly different?)

    So following Martins advice I completed an R40 form to claim tax deducted from my PPI payout.
    It appears you missed the following parts of his guide.

    If you were a higher-rate taxpayer in the year you got your PPI payout, you should've been paying 40%. You may have done this through self-assessment; if not, let HMRC know.

    Higher or additional-rate taxpayers

    Higher or additional-rate taxpayers will need to declare the extra income (just the statutory interest, not the other parts of the refund) to HMRC to ensure they pay the correct tax.

    Contact your tax office or call the income tax helpline on 0300 200 3300 if you need more info.


    Like a few other things in his guide this isn't totally correct, some higher rate payer payers with smaller amounts of interest could be due refunds.
    Last edited by Dazed and confused; 13-06-2019 at 5:17 AM.
    • hazelplt
    • By hazelplt 14th Jun 19, 9:27 AM
    • 6 Posts
    • 0 Thanks
    hazelplt
    HMRC refused tax reclaim
    I had a PPI pay-out and was taxed 20% on the interest. I've never had savings so thought I'd be eligible to get a tax refund, but HMRC responded to say I've paid the correct amount of tax.
    I rang them to query the allowance on savings and they said all my allowance was used on my employment, in that I've had my tax free pay and everything else it taxed. Before I could query further, I got cut off, and it took such a long time to get through I didn't try ringing again.
    I'm confused, is there a tax free allowance on savings interest or not?
    Should I challenge HMRC again?
    Please help me understand how it works.
    • Dazed and confused
    • By Dazed and confused 14th Jun 19, 9:47 AM
    • 4,899 Posts
    • 2,554 Thanks
    Dazed and confused
    is there a tax free allowance on savings interest or not?
    No. If you have used all your Personal Allowance on your employment income then your "tax free (Personal) allowance" has been used up.

    But there are two different 0% tax rates which apply to savings interest.

    One is really only available to lower earners (the savings starter rate) and one is available to those with income of about 17,500 or more in the current tax year (the savings nil rate, often referred to as the Personal Savings Allowance).

    Which tax year was the PPI interest received?

    How much PPI interest was received?

    How much tax was deducted?

    Did you receive any normal taxable savings interest in the same tax year?

    What were the taxable pay, tax deducted and tax code on your P60 for that year?

    If you earned 1,000 or more PPI interest then chances are you could be due about 198 tax refund but it depends on a few things hence the questions above.
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