PPI tax help

Flami_14 · 16 January 2020 at 2:28PM

Hello
I hope that I am posting this in the right place and that somebody can give me some advice.
Towards the end of last year I got a PPI payment of 3,071.20 for 2 separate loans. I have since tried to claim from the tax for the interest that was withheld.
On one loan Gross compensatory interest is £654.10 tax withheld was £130.82 leaving me with £864.68
The second loan Gross compensatory interest is £1,632.37 tax withheld £326.47 leaving me with £2,206.52
I filled in an online form to reclaim any tax I am owed with the help of the chat option. I then received a cheque for £26.
I rang to dispute this but was told by an agent that if I had filled in the form correctly then it was correct.
Before I write to chase this up I could do with a bit of advice
Thanks so much
Mel

[Deleted User] · 16 January 2020 at 3:00PM

Flami_14 wrote: »

Before I write to chase this up I could do with a bit of advice

Your post very carefully details the tax you paid on these refunds but, without access to details of what tax you've paid elsewhere and (indeed) your status as a tax-payer, no one here can usefully comment further.

As you've already been in touch with HMRC who have informed you the refund is correct based on what you've told them, then it either is indeed correct or you've filled out the R40 form incorrectly.

Dazed_and_confused · 16 January 2020 at 5:26PM

The simplest thing for you to do would be to simply look at the copy of the R40 you kept and post all the details and we can then tell you where you have gone wrong (if you have gone wrong) and how to correct things.

Also, what do you mean by towards the end of last year? The end of the 2018:19 tax year or the end of the 2019 calendar year?

If you filled in the form correctly the most likely answer is that you have untaxed interest from another source (bank or building society) and that has had an impact on the amount of tax refund due.

Finally, when you sent the form off how much tax were you expecting to be refunded? And why did you think it would be that amount?

Mr_PiggyBank · 17 January 2020 at 8:08AM

Hi,

Sorry if I appear thick but I had a PPI payout last year. The claim award letter was dated 30th March but I only received the Email on 10th April(from my claims company(I know stooopid). I'm guessing that my claim is therefore for the tax year 2018/19. The reason I ask is because I lost my job in February 2019 but I had worked the majority of that year so I'm unsure whether to even bother claiming. I was defintely NOT working at the time I received the payout.

Li help...................

Dazed_and_confused · 17 January 2020 at 11:51AM

It all depends on how much income you received in the tax year and in particular how much normal interest you received from banks, building societies etc.

For 2018:19 you need to have had at least £16,660 (or possibly £17,850) total taxable income before any tax is payable on interest so you may well due a refund.

If you post some figures - P45 details, Jobseeker's Allowance amount to 5 April (if you claimed), PPI interest and tax deducted and other savings interest it should be possible to give you an idea of what you may have overpaid.

Mr_PiggyBank · 17 January 2020 at 8:55PM

Hi

Thanks for your relpy. My gross wage for 2018/19 was £16484.16 paying £926.80 in tax for the year. I lost my job in February so from then to April I received Universal Credit with a total of £901 made up of Housing Benefit and Child Tax Credit and Unemployment Allowance.

The interest element of my payout was £2440.46 after tax. The tax deducted was £488.09

Dazed_and_confused · 17 January 2020 at 9:23PM

Universal Credit isn't taxable so if we assume that,

A) the £16,484 is taxable pay (gross pay/salary and taxable pay can be different for a variety of reasons) and

you haven't applied for Marriage Allowance and
C) you aren't Scottish resident for tax purposes in 2018:19 and
D) you have misunderstood the interest and tax figures and
E) you have no other taxable income in that tax year

Then your tax liability would be

Earnings £16,484
Interest £2,440
Total taxable income £18,924

Less Personal Allowance £11,850
Income to be taxed £7,074

£4,634 x 20% (basic rate) = £926.80
£366 x 0% (savings starter rate) = £0.00
£1,000 x 0% (savings nil rate) = £0.00
£1,074 x 20% (savings basic rate) = £214.80

Total tax due for the year = £1,141.60
Total tax deducted at source = £1,414.89

Tax overpaid = £273.29

Report back if any of the assumptions from A to E are wrong.

Mr_PiggyBank · 18 January 2020 at 3:16PM

Hi

Thanks for that? It'll probably be less than that as I got a tax refund for last year(nothing to do with PPI comp). As mentioned in my earlier post I actually paid a total of £901 last year(after refund)

I will defintely let you know the outcome

Many thanks once again

Dazed_and_confused · 18 January 2020 at 3:35PM

As mentioned in my earlier post I actually paid a total of £901 last year(after refund)

Not sure that came across in your previous post as what you said was,

I lost my job in February so from then to April I received Universal Credit with a total of £901 made up of Housing Benefit and Child Tax Credit and Unemployment Allowance

But anyhow, if you have already had £25.80 of your tax refunded then you will get a little less now. Although to be honest that wouldn't really make sense as £926.80 is the correct tax for taxable pay of £16,484.

Unless there's something relevant you haven't mentioned?

Mr_PiggyBank · 21 January 2020 at 7:01PM

Hi

Sorry, that was me being an idiot. I got my numbers mixed up in my reply to you. I did pay £926.80 in tax last year. The £901 was the amount of UC that I had recieved by the end of the tax year.

Thanks

Lizannh · 23 January 2020 at 1:12PM

I received a PPI refund from Barclaycard with the income tax already deducted.

The refund of payments was £584.33
Refund of interest charged on PPI premiums was £396.49
Statutory compensation was £1101.31
Income tax deduction was £220.26
Total refund was £1861.87

I understood that the tax should have been taken off the interest charged ie 20% of £396.49,
but when I queried this with Barclaycard they said that it was correct that they had taken 20% tax off the statutory compensation of £1101.31

Can anyone tell me if this is correct?

I’m a self employed non taxpayer. I will have to put the PPI information on 2019-20 self assessment tax form. I believe I will only need to put the interest that I was paid so will therefore only get the tax back on the interest amount of £396.49.

I also got a PPI refund from Barclays who took 20% tax off the interest paid, but in that case I didn’t receive compensation.

Any help would be greatly appreciated.

PPI tax help

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free