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    • Catweazel68
    • By Catweazel68 12th Oct 19, 12:59 PM
    • 24Posts
    • 2Thanks
    PPI Tax reclaim
    • #1
    • 12th Oct 19, 12:59 PM
    PPI Tax reclaim 12th Oct 19 at 12:59 PM
    Can anyone please give some advise re tax back on a PPI claim

    Basically I received approx £10k back from several PPI claims in Feb this year. Just over £1200 was taken off at source (tax from interest earnt)

    Now after reading Martins article about claiming tax back on PPI payments, I decided to see how much I could claim back as I am a 20% tax payer. I filled out the R40 form online and worked out that I should get just over £1k in tax back. This is allowing for the £1k personal allowance. I have no other savings so this was the only interest that I earnt in that tax year

    Now HMRC have sent me a letter saying that I am owed just under £200 in tax back. I have called them and they said that things are calculated a bit different when it comes to PPI. I find this strange because the example on Martins website makes sense to me and yet the HMRC lady couldn't quite manage to explain why PPI tax is worked out different. She is sending me a letter which she says will explain in more detail

    Any advice or suggestions greatly appreciated
Page 2
    • BoGoF
    • By BoGoF 28th Oct 19, 5:58 AM
    • 5,540 Posts
    • 5,536 Thanks
    Sorry I said itís confusing. I think as I am trying to do our self assessment for 18-19 and ppi for 19-20 and getting in a mess so I will ignore the SA Figures.

    So for 19/20 he will likely have 7k in taxable income. About £300 in interest from savings as moved half to an isa. Then the tax deducted on the two ppi claims were 900 and 1000.which was 20% of the amount paid. Thatís why hmrc have said that if his earnings are under 11500 he will get the full amount deducted plus the 300 tax already deducted for this year. Does that make sense now.
    Originally posted by Arthurarthur52
    Interest paid is taxable income and to have tax deducted from PPI of £1900 the gross interest would have been £9500 so adding this onto the £7k taxable income you mention you are way over the personal allowance. However as Dazed and Confused mentioned above there is the savings starter rate.

    Where does the £300 'other tax" come from.
    • Arthurarthur52
    • By Arthurarthur52 28th Oct 19, 7:53 PM
    • 30 Posts
    • 6 Thanks
    Hmrc back tracked today as we both have to do SA.
    So the ppi will be added to 20/21 tax year

    To answer your question he was paid holiday pay (be it under paid) to which they deducted £300 in tax.
    Going to file 18/19 this week so then just have to wait until 19/20.

    Thanks for your help.
    • Arthurarthur52
    • By Arthurarthur52 28th Oct 19, 7:57 PM
    • 30 Posts
    • 6 Thanks
    I meant wait until 19/20. But surely the ppi is. Not actually income and should be disregarded but the tax taken as income. What do I know.
    • BoGoF
    • By BoGoF 28th Oct 19, 10:09 PM
    • 5,540 Posts
    • 5,536 Thanks
    The reimbursement of the PPI premiums is not income. The compensatory 8% interest is.
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