PPI Tax Rebate, Eligibility, Deadline and Procedure to claim!

The UK residents can claim the tax rebate on the overpaid tax on the year they have received the PPI payment. The last date to apply for the PPI tax rebate is 6 April 2024. People who are still unaware of PPI tax refunds in the UK, should read the article to learn how to claim and when you will receive the PPI tax rebate.

PPI Tax Rebate

The UK government has introduced tax rebates on the PPI payments that are taxed during the tax year for UK residents. 

The PPI payout has three core elements – PPI payment, statutory interest, and loan interest to cover it. The basic rate of tax deduction by many lenders is  20% even when you don’t pay tax. 

The refund is a non-taxable payment, but if you receive 8% interest on your refund, like a saving interest, HMRC says it becomes taxable.

The UK government will compensate you for the PPI premiums you paid and the interest you have paid on the premiums.  

The HMRC will repay you the interest paid on PPI claims and the tax paid on the PPI payment. Now, the taxpayers, employers, PPI receivers, and employees can make a claim on the current tax year and the tax paid four years back on the PPI claim. 

The PPI Tax rebate is only processed when you apply for it. If you do not claim a PPI tax rebate, the tax you paid will forever stay with HMRC. 

So, currently, UK residents can claim the PPI tax rebate for the current and 2019/2020 tax year. 

• Scotland Adult Disability Payment

Who can claim the PPI tax rebate? 

The following points depict the eligibility for the PPI tax rebate:

• The UK resident who thinks they have overpaid the tax for the year they received PPI payments. 
• The non-taxpayers can also claim the PPI tax rebate for the year they received the PPI payout when the statutory interest pushes them over the taxpaying threshold. 
• Your income level and your earned interest from savings and investments decide your eligibility for the PPI tax rebate. 

Information Required for claiming the PPI tax rebates 

Before you claim your PPI tax rebate, you will need the following details to send to the authorities:

• Gross Interest you received
• Information on tax deduction
• The net interest you received in PPI payment.

You can show these documents as evidence proof for making your claim strong:

• The company who made the payment to you must have sent the final response letter, you could use that to show the interest and PPI payment information.
• You could also present the certificate you received from the company that refunded you to show the tax deducted from your PPI refund.

If you do not have these documents, then you can make a formal SAR (Subject Access Request) request to retrieve the information you need. Or you could contact HMRC to provide you with the information from their system. 

How to claim the PPI tax rebate 2024?

Eligible UK residents can claim the PPI tax rebate by submitting the R40 form to the HMRC. The residents living abroad would need to fill out the R43 form to claim the PPI tax repayment. 

Follow the steps to claim your PPI tax rebate:

• First, you must download the R40 or R43 for overseas residents from the website at https://www.gov.uk/guidance/claim-a-refund-of-income-tax-deducted-from-savings-and-investments
• The individual would need to fill in the required details, like tax deduction, net interest, gross amount, etc. 
• Evidence to support your PPI claim.
• Next, post the R40 filled form to the HMRC at the following address:

• PPI Tax Interest Claims
• HM Revenue and Customs
• BX9 1ZR
• United Kingdom

• The HMRC officials will review your request to get certain of your eligibility. 
• If the officials find you eligible, the HMRC will notify you in 8 weeks. 

When can you expect your PPI tax rebate in your account?

People who have applied for the PPI tax rebate can expect the refund in 5- 6 weeks in their bank account if all the information is accurate and there is no issue with your request. 

Generally, HMRC is fast with the PPI tax rebate processing, so you will receive the repayment on time for sure after the successful claim. 

The PPI tax rebates pay you back the tax you paid on the interest you received in the PPI payment. People who wish to claim the PPI tax rebate for the past four years must apply for the PPI tax rebate as after 6 April, they can’t claim their PPI tax rebate for the past 4 years.