Martin Lewis warns millions are likely to be owed a second PPI payout – but you’ll have to ask for it first

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Money Saving Expert founder Martin Lewis has warned that millions of people who have ever had a PPI payout, are likely to be entitled to a second chunk of money.

Appearing on The Martin Lewis Money Show last night (Feb 3), the financial guru revealed that thanks to the way compensation was calculated, lots of people in Britain could be owed hundreds more.

Speaking to viewers on the show, the 47-year-old explained it is all down to tax and and revealed what you can do to check you entitlement.

Although there is no tax due on payments or compensation, Martin says there is tax on interest you earn and interest is automatically added to payouts.

He added: “For the millions who’ve already reclaimed the £37billion so far, and the hundreds of thousands who’ve put claims in, it’s worth knowing PPI payouts are taxed.

“Most people whose claim is going through now or who have done it in the last four years can get this money – which can be £100s – back.”



Credit: The Martin Lewis Money show

Since 2016, there has been an allowance for money people earn on their savings, which is the reason why you can get tax back.

For those on the basic rate of tax (20p) get the £1,000 of interest they earn per year tax free.

Meanwhile, people on the higher rate of 40p, get the first £500 free.

And, you might be able to get up to £12,500 worth of interest a year before tax if you don’t pay any income tax at all.

The majority of people don’t earn quite that much interest on their savings a year, so claiming back the tax applied to PPI payouts back should work.

However, according to Martin, you may need to act fast.

He said: “f you got your PPI payout between April 2015 and April 2016 you need to do this by the 6th of April 2020.

“Then again, as the Personal Savings Allowance didn’t start until the following tax year, this is really only for non-taxpayers.”


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Martin urges anyone who thinks they’re owned money back to visit the HMRC website and make a claim.

He said: “Fill out the R40 form on the HMRC website, and you should get the tax back.”

To help you fill in the form, Martin has posted some tips to help you on his website– assuming you are on PAYE, and have simple tax affairs

  • Don’t miss the fact that at the top of the postal form, above the boxes, you must put your name and address and the tax year you got the PPI payout in
  • Where it says enter your agent’s details, that just means your accountant if you have one. If not, leave it blank
  • There are   official notes to help you fill in the R40, though sadly they’re mostly written in officialese, and cover a huge range of eventualities
  • Box 1 is where you enter your personal details. Ensure these are correct, especially your national insurance number. Then check it again. Get this wrong and it is all a bit pointless
  • Box 2 is where you put the info about your income. This tells HMRC whether you were a non-taxpayer, basic rate or higher rate. Find that info on your old P45 or P60. If you don’t have it, contact your (old) employer in the year you are claiming tax for
  • Box 3 is where you put the various details of the interest earned (ie, the statutory interest on PPI and interest on other savings)
  • Box 3.1 is where you detail the tax taken off the statutory interest part of the PPI payout (and any other tax taken off at source, though this last measure is likely to be rare)
  • Check through boxes 4 to 10. Most people won’t have anything to fill in here – but check just in case, and fill them in if you do
  • Fill in the repayment instructions in box 11 and sign box 12
  • If you had more than one PPI payout and it was in a different tax year, you’ll need to do a separate form for each

“I can’t promise writing the letter will help, but it’s better than doing nothing.” Martin wrote.

Visit the HMRC website for more information, or call 0300 200 3300.



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