Help after ppi now have a huge tax bill

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13

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  • Mellyhen
    Mellyhen Posts: 21 Forumite
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    The HMRC man said the same so the tax was miscalculated
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
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    Who advised HMRC of the PPI information?

    You do realise that that it is only the PPI interest which is taxable, not the actual PPI element.

    Check your hubby's PPI paperwork, does that show something like interest £7065 with tax deducted of £1413??
  • Mellyhen
    Mellyhen Posts: 21 Forumite
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    £11852 was the award before tax & their deductions we actually got just under £6000
  • Mellyhen
    Mellyhen Posts: 21 Forumite
    edited 8 July 2018 at 9:59PM
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    I think I need to talk to HMRC again don’t I?
  • Mellyhen
    Mellyhen Posts: 21 Forumite
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    The claims company advised me to submit a form to HMRC to try & claim the tax back, so is probably my fault they were informed by me!
  • Mellyhen
    Mellyhen Posts: 21 Forumite
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    We don’t live in Scotland & hubbys pay is well below £40,000
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
    edited 8 July 2018 at 10:14PM
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    To be fair the claims company have probably genuinely tried to help your hubby.

    But I would advise against phoning HMRC again until you are absolutely certain of the facts.

    If your hubby isn't a higher rate tax payer but earned more than £16,500 then he can take advantage of a 0% tax rate which applies to savings interest (this includes PPI interest). Upto £1,000 of interest can be taxed at 0% in this situation.

    So if the PPI paperwork shows the interest was actually about £7065 and his calculation is changed to reflect this then that reduces his taxable interest income by £4787 (£11,852 down to £7065).

    As basic rate payer this will likely reduce his tax liability by £958 so the bill for £758 will become a tax refund of £200.

    Once you (or hubby) are sure what the correct PPI interest which needs to be declared is then you will need to explain to HMRC that you told them the wrong info in the first palace and ask them to alter his calculation. Don't be surprised if they want copies of the paperwork as proof.

    £11852 was the award before tax & their deductions we actually got just under £6000

    That is an expensive stamp the claims company used!!
  • Mellyhen
    Mellyhen Posts: 21 Forumite
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    That is same as HMRC Guy said, so who calculated the tax & is a ppi claim classed as savings because it is on the HMRC paperwork is that what’s messing this all up?
  • Mellyhen
    Mellyhen Posts: 21 Forumite
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    Not claim I meant to say ppi award
  • Mellyhen
    Mellyhen Posts: 21 Forumite
    edited 8 July 2018 at 10:26PM
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    I will talk to the claims company tomorrow, Thankyou everyone who has tried to help me x
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