03/04/2021
Why are people owed tax back on PPI pay outs?
On 6 April 2016, the personal savings allowance (PSA) launched. It allows basic 20% rate taxpayers to earn up to £1,000 a year of savings interest tax-free, higher 40% rate taxpayers can earn £500 and top 45% rate taxpayers don’t get anything. The statutory interest from PPI payouts counts within your personal savings allowance.
Yet unlike savings which are now paid without any tax taken off, PPI payouts still automatically have 20% tax deducted before you received it. So if like most people, you haven’t earned over your PSA in the year your PPI claim was repaid, then you can claim it back.
