Claiming back interest on PPI payout

[Brizoh71]

In the last tax year I received a PPI payout, the issuer paid the statutory 20% on the simple interest to HMRC as required.

The total interest paid out in the claim was around £1300, my issuer paid around £265 income tax. I have tried reclaiming this from HMRC using R40 but they claim I owe them more in tax as I have received too much savings income?

I am aware that I am entitled  to receive £1000 tax free savings income each tax year, so I thought I'd be able to claim back the difference? Is it not the case that HMRC can only claim tax on the difference between £1000 and what was actually received, so circa £300 and refund the remainder back? Or am I barking up a wrong tree?

[honeybee13]

Hello, welcome to CAG.

Have HMRC sent a letter about this please? If so, maybe you could upload it so we can see their exact wording. Cover up your name, address and any reference numbers.

Best, HB

[Brizoh71]

They haven't sent a letter no, I can see it in my end of year tax return though via Gov.uk. I'm not sure how to challenge it, any advisor I've spoken to says it is correct but won't elaborate on how they've arrived at their conclusion.

[honeybee13]

When you say adviser, do you mean at HMRC?

Maybe you could typ up what it says online about you owing money? It's hard to advise on what you think it says.

HB

[dx100uk]

simply pointout (with a copy of your PPI award letter from the original creditor) to HMRC that they already deducted the tax.

[slick132]

To determine what tax is due and if any should be refunded, you must look at your income from all sources including self employment, PAYE employment, dividends and savings income.

1. Are you a basic rate taxpayer or a non-tax payer.

2. Did you receive any other savings income such as bank interest