Are you due tax back on your PPI claim?

In recent years we have all been bombarded with calls about PPI claims, and at present, missold payday loans.

If any of your claims have been successful and you have received payment, an element of the money you received would have been interest. This interest will have had tax deducted at source at a rate of 20%.

You could potentially reclaim some or all of this tax back if the following applies:

• Your total income for that tax year is below your personal allowance
• You are a basic rate tax payer with Interest income below ￡1000
• You are a higher rate tax payer with Interest income below ￡500

You can only reclaim PPI tax going back four tax years, as well as the current one. So as we’re now in the 2021/22 tax year, that means the furthest you can claim back is the 2017/18 tax year.

Therefore, tax reclaims can no longer be made on any PPI payouts received on or before 5 April 2017.

If you believe you’re owed tax back and haven’t reclaimed it, the simple answer is to use the ‘Claim a refund of income tax deducted from savings and investments’ form?R40, preferably filling in the online version.

HMRC makes these forms pretty complicated, as it includes a whole host of other things too. So it always best to speak an accountant.