PPI tax is automatically taken away at 20% from your PPI payout. This means there is a high chance that you have not been awarded the full amount of what you have been owed when you made your compensation claim. You may be feeling a little cross that you were even charged tax in the first place on your refund. That is completely understandable. No one likes thinking that they are entitled to a large compensation fee, only to find that it has been taxed. This is why Gowing Law Solicitors are here to help you get your money back. PPI tax claims can be extremely complicated. That is why we have created a helpful self-assessment form to get you the support that you need. Start your PPI tax journey now with Gowing Law Solicitors and claim your PPI payout:
The basics of PPI
To understand the basics of PPI tax, you need to understand Payment Protection Insurance (PPI) itself. PPI was sold alongside financial lending schemes in order to protect people if they could not pay back the money due to emergencies, such as death, illness and unemployment. This was included in:
- Credit card schemes
- Mortgage schemes
- Lending plans
- Catalogue payments
However, a lot of PPI schemes sold were not actually suitable for the people who purchased them. For instance, if someone was self-employed, why would they need PPI to protect them since they were paying their own wages? Or, what if they were planning on moving abroad to start a business in a different country? These schemes were not personalized to suit the owner. Therefore, most people wasted money purchasing these protection schemes. This is why so many people claimed compensation for these losses until the deadline in 2016.
Why did HMRC take tax away from my PPI payout?
Your PPI pay-out/compensation is made up of three elements:
- A refund of the amount of PPI you paid in.
- Whether the bank added an extra loan to your pay-off of your PPI. This would have charged you interest.
- You received statutory interest (8%) on both of the previous sums for each year you got PPI.
Only your statutory interest can be taxed. If it is taxed then this will be displayed on your PPI pay out statement. This tax was taken off your PPI pay-out because the statutory interest was intended to get you back to your original financial position if you had not been mis-sold PPI. Therefore, it would count as saving’s interest, aka. Interest that has been created from your saved money.
How much time could it take to make a PPI tax claim?
This depends entirely on how complicated your PPI tax claim is. For those who work with Gowing Law, it can take around 5-6 weeks after you have submitted your details. Whether you have been rejected by HMRC before, or perhaps have never made a claim before, Gowing Law’s expert solicitors will get your money returned to you as quickly as possible. That way you can save your funds for a rainy day or you can use it to enjoy the summer. The more information you provide about your PPI tax and previous pay-out, the more likely that you will have a successful return.
Gowing Law Solicitors can help you with your PPI payout!
So far, Gowing Law Solicitors has been able to reclaim over £10,000 in rebates for our customers all over the UK. So far, all of our customers have been extremely happy with our services. Many of these clients did not even know that they were due back £100’s. All you need to do is use our online submissions form to get started. Fill in your personal details, claim details and then submit the form. Our friendly team will then get in contact with you as quickly as possible to discuss your claim and to get started.
Read more about PPI tax
As you can see from our blog, we update it with articles every week about different UK laws and legal topics. If you want to see more information about PPI tax, please see our previous blogs below:
- What could make me eligible for a PPI Tax Reclaim?
- The top reasons why you need a solicitor to help you with PPI Tax Claims
- Do you want to claim PPI tax back? Here’s how it works!
- Can I get a PPI tax refund if I’m Self Employed? Learn how!
Our blog also discusses financial mis-selling, work accidents, personal injury and immigration cases. If there is a topic that you would like us to cover, please let us know. Send it to firstname.lastname@example.org. We can also add you to our weekly newsletter. Just let us know!
We look forward to seeing you in our next blog.