Payment Protection Insurance (PPI) was the biggest financial misselling scandal in UK history, with more than 64 million policies that were potentially mis-sold.
At Resolver, we helped people raise more than 2.5 million PPI claims for free. However, after a decade of court cases, claims, and billions in compensation, the Financial Conduct Authority introduced a deadline – all outstanding PPI claims had to be submitted by the 29th of August 2019.
Following the final flurry of claims, it’s been rather quiet on the PPI front. Yet we’ve recently been hearing from a number of our users asking us to re-open their old PPI case files.
The reason for this? To reclaim the tax they paid on their compensation from HMRC.
Did you know that you may have paid tax on your PPI compensation? If the answer’s no, then you aren’t alone.
While tax isn’t deducted from PPI refunds, it is from the statutory interest paid alongside the refund – this was 8% per year as compensation for being deprived of money on top of the amount of premiums paid over the time you had the policy.
Statutory interest is taxable as savings income, but most lenders deducted the basic tax rate of 20% before paying out to their customers. This means that many people would have paid far too much tax on their PPI payouts – especially if their total income for the year was below their personal allowance or personal savings allowance.
So depending on the tax year the payout was made, and your other taxable income in that year, you may be due a refund worth thousands!
Not sure if you qualify for a claim? Our HMRC-approved partner can find out in less than a minute – just click here.
While many people have overpaid tax on their PPI compensation, the good news is that this can be reclaimed as a tax rebate.
HMRC gives people four years from the end of the tax year in which they made an overpayment to claim it back as a refund. Unfortunately, this means that you cannot reclaim tax on any PPI payouts that you received before 6th April 2019.
However, if you did receive compensation from a PPI claim in the tax year 2019/20 or anytime afterward you’re still able to claim a PPI tax rebate. But you’ll have to act fast – within these guidelines, you only have until 5th April 2024 to claim back any overpayment of tax.
Check out whether you’re eligible to make a claim with our HMRC-approved partner.
If you believe that you may be entitled to claim back some tax paid on your PPI compensation you can make your claim for free via gov.uk using the R40/R43 form.
As well as providing basic personal details, you’ll have to supply key information relating to the original claim. This includes net interest, the tax deducted and the gross interest you received from your PPI payouts, as well as any other taxable income you had in the same year.
We appreciate that the form and process for claiming a PPI tax rebate is quite complex. Moreover, if you had more than one PPI payout and it was in a different tax year, you’ll need to do a separate form for each – making it quite time-consuming for those who’ve made multiple successful claims.
For more detailed guidance on reclaiming a PPI tax rebate and filling in the R40 form, you can download our free guide using the link below.
If you feel like the hassle of filling out these long and complex forms is putting you off claiming what you’re due, then we have a partner who can help.
Our HMRC-approved partner provides consumers with an easy and accessible option for claiming the PPI tax rebate they are entitled to. We’ve partnered with them as a licensed tax agent who can use their expertise to help consumers submit their applications as quickly and easily as possible.
Once you raise your claim, they’ll do all the hard work – checking your eligibility, calculating your refund and completing the form on your behalf to avoid any mistakes that might hold up your rebate.
If you’ve lost the details of your PPI payout, no problem. All they need is some basic information and documents. They’ll also liaise with HMRC until you receive your money.
For a small fee on successful claims, their service could save you a lot of time and effort and ensure that you don’t miss this last chance to get back what you are owed by HMRC.
To find out more about their quick and easy service or start your claim, click here now.
To download our free guide on making a claim yourself click here.
If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at firstname.lastname@example.org.