Do you remember those annoying ‘claim back your PPI’ adverts? Thousands of people received repayments, which included interest calculated at 8% on the PPI premiums refunded.
Where the PPI settlement was paid after September 2013 the bank or insurance company should have deducted tax at 20% from the interest element. This was correct but if the interest received is covered by the taxpayer’s savings allowance of £1,000 or £500 that tax can be reclaimed.
This is turning into another potential scam as ‘tax refund companies’ are persuading taxpayers to submit refund claims for the tax deducted and some keep a large slice of the refund. HMRC is also getting overwhelmed with claims.
If you received a PPI settlement, the interest element and tax deducted should have been declared on your self assessment tax return for the year in which you received the money. We can help you amend your earlier tax return to declare any PPI interest and claim a tax refund.
If you are not within the self assessment system you need to claim the tax refund on a form R40. This can be done online by signing in through Government Gateway or by post, but an online claim will be processed quicker. Do not under any circumstances let anyone else use your Government Gateway credentials to claim a tax refund on your behalf.