A PPI pay-out is designed to make sure that you get the money back that you spent on a financial policy that was not suited to your own personal situation. That’s why it can feel frustrating when you finally get paid, only to realize that part of it has been taken away due to a tax deduction. So, the real question is, why did they take away the PPI tax in the first place? You were owed a certain amount of money, therefore you may be feeling annoyed that you did not get the full amount back. That’s why, after you have learned about the basics of PPI tax, you need to consider whether or not you are going to get it back from HMRC.
Gowing Law Solicitors can help you with your claim. We have already helped thousands of people around the UK get the money back that they deserve from a PPI tax pay-out. You could be owed hundreds of pounds. All you need to do is get in contact and we can start you on your PPI tax claim journey:
The Basics of a PPI pay-out
Before we discuss whether or not you should get your tax returned to you, it’s important that you get a basic understanding of what PPI is in the first place. That way you can figure out whether or not you are eligible for a PPI tax return. PPI stands for “payment protection insurance”. It was used as a safety net to guard you against any financial problems if you bought some sort of lending scheme. This could include:
- Credit Cards
- Mortgages
- Catalogue Payment Plan
These are only a few examples of what a PPI plan could have been attached to. Most people may have thought that PPI was compulsory or were pressurized into buying it just in case they had any future problems paying back their loans. What they did not realize was that a PPI plan was not fully catered to their own financial situation. Take a look at our example below to get an idea of how PPI could have been mis-sold:
Being self-employed, Mark did not need to worry about whether or not he was going to be paid by a “manager” or “employer”. After all, he was already employed by himself. As the policy was a loan and was specifically designed to protect him if he did not get a wage from his employer, it it did not fit his needs. That is why it was mis-sold to him and he was owed a PPI pay-out. However, even if he got a PPI pay-out, there is still a chance he did not receive it. This is because of PPI tax.
Did you know that there is a second-wave for PPI pay-outs?
According to The Sun, a second wave for PPI pay-outs is just around the corner! This is because banks have had to refund commissions over 50%. Therefore:
“UK banks could end up forking out billions more pounds to customers affected by the PPI scandal.”
Already, UK banks have paid £38 billion to over 12 million customers. You could be one of these people who is owed a PPI refund. The ways you could be eligible include:
- If you have been denied payments.
- Only being given partial repayments.
- Never having claimed for mis-sold PPI in the first place.
If you are feeling curious about the second PPI pay-out wave, make sure to talk to Gowing Law’s trained tax specialist solicitors for more details. That way we can make sure you are completely eligible before moving forward with your claim.
Why did I not receive my full PPI pay-out?
Now, this is where we steer back to the original point of this article. You may have noticed that when you received a confirmation of your PPI refund, it did not have the full amount listed on it. Instead, you may have noticed that there was a section talking about tax that was taken away. In most cases 20% of your PPI tax may have been automatically deducted by your bank to make sure:
- You did not go over your personal savings allowance (PSA).
- You were not given any interest on your PPI pay-out.
This tax would have been given to HMRC. In order to get it back you can send in a R40 form. However, these can be complicated and sometimes you may accidently invalidate your claim by sending in the wrong information. Having a trained tax solicitor on your side can make sure that, even if you have already been denied a claim, you can potentially still get your money back. Gowing Law Solicitors can help you by filling out the tricky forms and getting you the pay-out that you deserve.
Should I have paid this tax in the first place?
In most cases, no, you should not have had to pay this tax. It may have been automatically deducted from your pay-out even if you were nowhere near going over your PSA. This is why you have the right to claim it back from HMRC. Now, when you get a PPI pay-out, it is usually made up of three financial elements. The elements are:
- The monetary refund of your PPI.
- Additional loans that may have been placed on your PPI payments by the bank to help you pay it back. These payments may have added interest.
- A statutory interest that was increased every year at 8%. This interest should have been added to both of the previous elements.
All three of these PPI pay-out elements are made to help you return to your original financial position before you bought PPI. However, when you had the PPI pay-out, the automatic deduction may have been made on the assumption that you had already gone over the original amount that you have been estimated. This would have been seen as adding too much interest, especially if it went over your PSA. That is why it may have been automatically taxed. To find out whether or not you have been unfairly taxed, make sure to take a look at the PPI pay-out letter you received. If any tax has been taken away then it should be listed. You can then use this as evidence to try and get the money that was deducted back.
Could I get a lot of money from a PPI tax pay-out?
PPI tax is a form is financial mis-selling. Just like any other financial mis-selling case, the amount you receive will depend on the amount you put into the claim in the first place. The more you have paid in through your rates, the more likely that you could get out of a PPI tax pay-out. Take a look to see what bracket of rate payment you could fall in to:
What sort of evidence do I need for my PPI tax pay-out?
If you think that you are eligible for a PPI tax reclaim, it’s time for you to collect your evidence in order to prove that you are owed money from your previous PPI pay-out. You deserve to get it back from HMRC! When you speak to a solicitor about a tax reclaim, make sure to bring them all financial evidence to help them estimate a pay-out. This can include the amount you paid in to your PPI scheme, your original pay-out document and whether or not you missed any potential payments. You can also bring forward any communication between you and your financial advisor/lender or your bank. You can also make them aware of your grievances by writing them a letter to tell them of your intentions. This will let them know of what you intend to do.
Can I claim PPI tax if I am self-employed?
Of course you can! If you have been mis-sold a PPI policy, and received a pay-out, you have every right to get your money back whether you are in full-time employment or run your own business, if you have had money taken away from you, you should get it back. In fact, the fact that you are self-employed, this can prove that you were mis-sold a policy in the first place. That’s why you deserve to get every penny of your money back, including any tax that was taken away!
Can I claim PPI tax if I am now living abroad?
Although you and your solicitor will have to work on a different form (aka. an R43 form), you also have the right as a UK citizen to get your money back. You may have taken out your scheme to make a business for yourself abroad. That’s why if the PPI policy was not for you, and you got your money back, you deserve to also get your tax back. Gowing Law Solicitors can help you with these types of claims.
PPI tax Claims vs PPI Plevin claims
One important thing that we do need to discuss before we help you with your PPI tax is known as a “PPI Plevin case”, also known as being “Plevined”. If you are going to make a claim, you need to now which one of these you are going to pick. You cannot claim tax if you make a PPI Plevin case. So, make sure to discuss with a solicitor the type of case you are going to claim for.
Being “Plevined” means that you fall under the Plevin rule. If more than 50% of your PPI’s cost was actually commissioned from your lender, or perhaps you did not know that you paid a high commission fee with the lending scheme, you could be owed thousands in compensation! You may not have even noticed that this type of commission was added to your bill. You simply paid it back without even realizing it!
The good news is, if you fall under the Plevin rule, you have the potential to make a lot of money through compensation. This is because most of the commission that was taken in by the banks was at least 67%. That means you could be owed this money, plus the amount of interest that was added to the total fee and your commission.
Gowing Law can help you with this type of case. You just need to decide whether you think you would be more eligible for a Plevin case or PPI tax. Remember, you cannot pick both!
How long do I have to make a PPI tax reclaim?
If you want to make a PPI tax reclaim, you will have around 4 years from your tax year. This can also be from the time you received your PPI pay-out. Gowing Law can then contact HMRC on your behalf and fill out any tricky paperwork.
Gowing Law is ready to help you get your PPI tax back!
If you are ready to get started on your PPI tax claim, Gowing Law’s helpful team of expert solicitors can guide you through the claims process. Use our simple assessment form to get started. Our team of lawyers can then work with you to ensure that a successful PPI re-claim is sent to HMRC. Then you can get your money back. We can offer you free advice and consultations. If you want to work with us, we offer our services on a “no win-no fee” basis. That means you will always come out on top with any sort of claim.
Contact Gowing Law today by calling 0800 041 8350, emailing info@gowinglaw.co.uk or by using our direct messenger on our contact page. Our team would be more than happy to answer any additional questions you may have.
Read more about PPI tax claims
Don’t forget to check out our other law articles! Read more about PPI tax claims and financial mis-selling from our law blog. We update our blog with new content every week to ensure that you can keep updated about UK law. If you can’t see the topic you are looking for, don’t worry! Just write in to let us know. We would be happy to make an article based on your suggestions. Email info@gowinglaw.co.uk now.
We look forward to helping you with your case soon!
