With billions of pounds being reimbursed by banks due to mis-sold PPI, many people who received these PPI refunds are able to reclaim the tax taken from their PPI pay-outs.
PPI refunds were taxed at 20% on the 8% Statutory interest amount put onto PPI refunds designed to match inflation so that people did not lose out financially because of PPI (Somewhat defeats the object to tax this you would think…).
However, due to marriage Tax allowance and Personal savings Allowance, of which the legislation was passed in 2016, this tax may now be eligible for a rebate. The amount of personal savings allowance does vary and is dependent on the individuals tax bracket:
- Basic Tax Bracket 20% – £1000 P.S.A
- Higher Tax Bracket 40% – £500 P.S.A
- Top Tax Bracket 45% – £0 P.S.A
In terms of what this means on the whole, David Bryers, assistant Money Editor of The Times has stated : “Millions of people who received compensation…may be owed tax rebates totalling hundreds of millions of pounds.”
“A total of £13 billion has been paid out in compensation since the savings allowance was introduced in April 2016, of which £1.75 billion is thought to be interest….Based on these figures, savers may be owed up to £350m in tax they should not have paid.”
Whilst you can attempt to claim this tax back yourself via an R40 Form provided by HMRC, these have conveniently been made drawn-out and complicated.
We are now taking clients to reclaim PPI Tax on a No Win, No Fee basis. The process couldn’t be simpler, just fill out the Case Ready Form, we’ll automatically send you a contract via email for you to submit an e-signature, and we’ll take it from there.
If you were taxed on your PPI pay-out don’t hang around. You might be able to book that stay-cation after all!