Reclaiming tax deducted from lender on PPI claim
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keithgawler
Posts: 55 Forumite
I'd be grateful for clarification from those who have done it on the outcome of reclaiming tax deducted by a lender on a PPI claim. I have had a modest success with a claim and the statutory interest amounts to a few £1000's. I've found one thread on the net on the debtcamel website (sorry forum rules prohibit providing a hyper link but the rest of the web page is ppi-payday-refund-get-back-tax) concerning the process for reclaiming tax back from HMRC if either a non-tax payer or to get a refund up to the £1,000 tax-free interest limit we all now have (or £500 for higher rate tax payers) so I understand the process but just want to confirm how much I will get back.
My expectation is to get back the tax deducted up to the "free" £1,000 limit from HMRC but the aforementioned link suggests I will only get £200 back and hence I've "lost" in my case some £300 of the c£500 in total tax deducted in my case by the lender.
Grateful if someone can put me right..........
TIA
My expectation is to get back the tax deducted up to the "free" £1,000 limit from HMRC but the aforementioned link suggests I will only get £200 back and hence I've "lost" in my case some £300 of the c£500 in total tax deducted in my case by the lender.
Grateful if someone can put me right..........
TIA
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Comments
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If you are entitled to the £1000 savings allowance then the max you will get back is £200. If you have any other sources of interest that have been paid tax free then this needs to be taken into account.0
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My expectation is to get back the tax deducted up to the "free" £1,000 limit from HMRC but the aforementioned link suggests I will only get £200 back and hence I've "lost" in my case some £300 of the c£500 in total tax deducted in my case by the lender.
The £1,000 tax free limit is a limit on the interest you can receive before you pay tax. Hence any interest over £1,000 is taxed at 20% and the tax which would otherwise be due on the first £1,000 of interest is waived -which is why HMRC refund you £200.
It does not mean you don't have to pay the first £1,000 of tax charged on interest which is what you mistakenly seem to believe.0 -
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keithgawler wrote: »My expectation is to get back the tax deducted up to the "free" £1,000 limit from HMRC0
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Thanks all for the responses thus far which confirms what I thought to be the reality. I'm still wrestling with the fact that if I had received the £500 approx. interest gross then I wouldn't have paid tax on it so I don't really understand why I don't get the full amount of tax deducted by the lender refunded. I accept that I'm £200 better off than I would have been before the rules were changed for FY16 as a basic rate tax payer. Clearly my maths degree many decades ago has let me down with increasing age!0
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Sorry quick question, if as a non-tax payer in year 2017-18 you are charged tax on the interest from a PPI claim, then you can clearly reclaim the tax on form R40. If you do not submit a R40 claim, will HMRC finally work out that they owe you a refund at the end of the financial year and automatically refund the amount due?2 Separate arrays, 7 x JASolar 380w panels (2.66kWp) south facing, 4 x JASolar 380w panels (1.52kWp) east facing, 11 x Tigo optimizers & cloud, Growatt SPH5000, Growatt 6.5kWh Hybrid battery (Go-live 01/12/21) - Additional reporting via Solar Assistant.0
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Just bouncing this back up the board in case anybody can answer my question above please. Many thanks,2 Separate arrays, 7 x JASolar 380w panels (2.66kWp) south facing, 4 x JASolar 380w panels (1.52kWp) east facing, 11 x Tigo optimizers & cloud, Growatt SPH5000, Growatt 6.5kWh Hybrid battery (Go-live 01/12/21) - Additional reporting via Solar Assistant.0
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