Tax on PPI refund

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Frank12
Frank12 Posts: 1 Newbie
in Reclaim bank & credit card charges
Taxed income paid for Insurance, Why should refund be taxed?

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  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
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    Frank12 wrote: »
    Taxed income paid for Insurance, Why should refund be taxed?
    The refund itself is not taxed. Only the interest element is taxable. If you are not a tax payer, you can claim this back from HMRC.
  • dunstonh
    dunstonh Posts: 116,371 Forumite
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    Why should refund be taxed?

    The refund of premium is not taxed. Only the interest element added to the refund is taxed. And being interest, your personal allowances can be used where applicable and if you are not meant to pay tax, HMRC will refund. Or if you are a higher rate taxpayer, you may have to pay more tax.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
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    As others have said it is just the interest which gets taxed not the PPI refund itself.

    Depending on your personal circumstances you may well be able to get a repayment of some or all of the tax. Or you could owe additional tax over and above the amount already deducted.

    Impossible to know without more information about your total taxable income.
  • g7mce
    g7mce Posts: 2 Newbie
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    Im about to get a PPI refund, and the letter states im to be taxed. Im self employed. Who do i contact to confirm/reclaim the tax.

    I've had previous PPI payments, and payed tax im told by the banks, how can i check claim these?

    Thanks
  • dunstonh
    dunstonh Posts: 116,371 Forumite
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    Im about to get a PPI refund, and the letter states im to be taxed. Im self employed. Who do i contact to confirm/reclaim the tax.

    Your accountant if you use one. Or in your annual tax return.
    I've had previous PPI payments, and payed tax im told by the banks, how can i check claim these?

    If they were in previous tax years, you would have put them on your tax return. Were these complaints before interest became tax free upto £500/£1000 or after?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • g7mce
    g7mce Posts: 2 Newbie
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    Hi,

    I am due a cheque anyday, and there's £150 tax to be taken off. I dont use an accountant, except to do my Self assesment. I'll contact them.

    On similar note, this time used a PPI company, there comision is based on the total including income tax, is this correct?
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    Yes, that's correct.

    Claims companies may be lazy, but they're not stupid.
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