YOU MAY BE OWED TAX BACK ON PPI PAYOUT’S INTEREST!
• If you received a payment for mis-sold PPI you could be eligible for a PPI tax refund!
• The tax was automatically deducted, even though most people didn’t need to pay it.
• In April 2016 the personal savings allowance was introduced which allows taxpayers to earn up to £1,000 a year tax-free on their savings which includes the statutory interest paid on PPI claims.
What is a PPI Tax Rebate
On 6 April 2016 the personal savings allowance (PSA) launched. It allows basic 20% rate taxpayers to earn up to £1,000 a year of savings interest tax-free, higher 40% rate taxpayers can earn £500 and top 45% rate taxpayers don’t get anything. The statutory interest from PPI pay outs counts within your personal savings allowance.
Yet unlike savings which are now paid without any tax taken off, PPI pay outs still automatically have 20% tax deducted before you received it. So if, like most people, you haven’t earned over your PSA in the year your PPI claim was repaid, then you can claim it back.
AM I ELIGIBLE?
The PPI payout is taxed in the year it is paid, so even if you took out a PPI policy in, say, 2004, if it was repaid in 2016, it’s that later tax regime that counts.
If you were a non-taxpayer in the year the PPI was paid out (eg, currently that means those earning less than the £12,500 personal allowance), unless the statutory interest pushes you over the taxpaying threshold, you can claim all the tax back.
WHY WAS THIS TAXED IN THE FIRST PLACE?
The refund of the PPI premiums isn’t taxable, but if 8% notional interest has been added to your refund, this is treated like interest you have received on savings and it is taxable income and tax will have already been taken at source.
CAN ANYONE CLAIM?
Unfortunately you can’t reclaim tax on payouts received before 6 April 2016 You can only reclaim PPI tax going back four tax years, as well as the current one. So as the 2020/21 tax year has kicked in, that means the furthest you can go back is the 2016/17 tax year.
Why Use claim my tax?
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PPI Tax rebate faqs
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HOW MUCH WILL I GET BACK?
It varies hugely depending on the size of your PPI pay out and when you took out the loan.
HOW WAS PPI MIS-SOLD?
Up until 2012, if you went to the bank to take out a loan, finance deal for your car, or a credit card, then there’s a chance you’d have been sold PPI.
Banks and other financial institutions often explained PPI poorly, missing key details such as what it covered, whether the customer really needed it and whether or not they’d be able to make a successful claim.
In some cases, banks simply added it to loans without customers’ consent.
DO I HAVE TO GIVE MY BANK DETAILS?
We will not ask you for your bank details until we have your payment from HMRC. The reason we then ask you for them is to bank transfer your payment. If you still do not want to give us your bank details we can send you a cheque.
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