When the revelation came out that Payment Protection Insurance was being mis-sold to millions in the UK, it changed the consumer landscape. Being able to claim back money that you lost to this officially ended on 29th August 2019. But that doesn’t necessarily mean the end of the PPI scandal.
If you are one of the many, many people who were owed money, you may not have gotten all of it. Part of the repayment for a PPI was annual interest of 8%. The rest of the other part or parts of the repayment were the actual money you paid as part of the policy. If tax is owed on a PPI repayment, in most cases this is deducted by a standard 20% rate. This is where the problem comes in.
Within the past four years, the personal savings allowance was introduced. This allowed people to get £1000 of tax-free savings per year. As you can probably see, most firms that repay PPI have done so assuming the 20% tax rate incorrectly. That means that those who have received a repayment within this time-frame are probably owed more. What’s better is that this only applies to the year in which the repayment was done, not the year the policy was taken out.
If your policy began in 2001 but you were repaid in 2017, if the incorrect tax code was used then, that’s what determines your entitlement to getting the tax back. More than this, if you were under the tax threshold of the given year (currently £12,500) then you would automatically be entitled to all of that tax back. It’s definitely worth at least checking if this applies to you.
How to claim this back
If you’ve checked to see if this information applies to you, you can apply for reimbursement through HMRC. You’ll need an R40, or R43 if currently living abroad, which is a ‘Claim a refund of income tax deducted from savings and investment’. There are guides to help you with the process, although they aren’t always as helpful as they could be. The form can be done online or printed off and sent in, but they prefer it to be done electronically is possible.
You ordinarily have 4 years from the close of a tax year in which to make a claim for tax repayment. If you were repaid in November of 2017 for instance, you ave 4 years from April of 2018.
How much could I be owed?
As with the original PPI payouts, this is largely dependant upon how much you paid initially. The more you paid, the better, but the longer you paid it for, the higher the sum too. A total of £5,000 paid in PPI over 10 years will pay out more than over five years. It’s difficult to iron this out to a round figure, but as the average PPI payout was £1,700 and the people who were mis-sold PPI had it anywhere from a year to thirty, we estimate that most people are going to be due over a hundred pounds.
Why not check to see what you’re owed today?