Did you know you were taxed from the PPI Compensation you received? We can help you claim that Tax back.
September 20, 2021
PPI Tax Refund Claim
What is PPI (Payment Protection Insurance)?
According to the FCA (Financial Conduct Authority) and The Financial Ombudsman Sevice (FOS), Payment Protection Insurance
- “was usually sold with products that you need to make repayments on, like a loan, credit card or mortgage.”
“The PPI was designed to cover repayments in certain circumstances where you couldn’t make them yourself. These include if you were made redundant or couldn’t work due to an accident, illness, disability or death.”
But the FCA (Financial Conduct Authority) found out that mis-selling of PPI
was rampant. More than £38 billion has already been paid back to people who complained about the mis-sold of PPI. That is what we call PPI Payout.
Did you receive a Payment protection insurance (PPI) payout?
Tax may have been deducted on your PPI payout. Why is tax taken off from PPI payouts? It is because the money you get paid back for PPI is a refund from the PPI
you paid or the bank may have added outrageously an extra loan from your original loan only to pay for the PPI and you get annual statutory interest of 8% to match inflation. Among the three mentioned only one aspect of the PPI payout is tax deductible. Most financial institutions deducted 20% of this tax (statutory interest) before reimbursing your PPI payout instead of 8%. So if you received a £1,000 PPI payout you are entitled nearly about £100 tax return or if you received £15,000 PPI payout then your tax return could be as close as £1,470.
Below is the table conversion for the Tax Return or Tax Refund for your PPI Payout:
| Total PPI reclaim | Tax taken for PPI taken out 3 yrs before | Tax taken for PPI taken out 5 yrs before | Tax taken for PPI taken out 10 yrs before |
|---|---|---|---|
| £1,000.00 | £40.00 | £60.00 | £100.00 |
| £3,000.00 | £120.00 | £180.00 | £300.00 |
| £7,500.00 | £300.00 | £460.00 | £730.00 |
| £15,000.00 | £610.00 | £910.00 | £1,470.00 |
Even if you are self-employed, a freelancer or you work for a company; you should be aware of the amount of the refundable tax. Most of the banks that refunded the PPI did not know exactly how much tax you pay and that is why most of them assumed that you belong into the basic category and deducted 20%. This means that most of those individuals in basic rate and even individuals who are non-tax payers may be able to reclaim on the governments tax-free savings allowance.
If you are interested if you are due for a PPI Tax Refund you can get in touch with our team of professional analysts who can build a strong case to ensure the best outcome. We provide 100% online consultation and No Win No Fee policy.
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