Martin Lewis, Money Saving Expert, appeared on his weekly segment on BBC Radio 5Live offering the latest tips and tricks to Britons on money queries. A particular issue of note is one which has not been considered in a while due to the complaint deadline passing – PPI. PPI, or payment protection insurance, was commonly sold with products Britons needed to make repayments on, but it was found the insurance was mis-sold for a long period of time.
As a result, people could easily claim tax back from their PPI payout which could be welcome for their pockets.
Martin continued: “If you haven’t hit your limits, which the vast majority haven’t, and you’ve had a PPI payout, you should claim the tax back.
“Now, you can go and read online how you will be able to do this.
“You’ll need a R40 form and it is a bit complex, but there are certainly good guides online where you won’t have to pay anyone to do it.
“This could be £800 or £1,000 for example, if you ended up with a big PPI payout.”
While tax back on a PPI payout could be the pinnacle of years of claiming Britons have been forced to go through, there is a sense of urgency.
This is because, Martin highlighted, there is an important deadline just around the corner when it comes to getting tax back from PPI.
Failing to bear this in mind could mean individuals end up missing out on money they could have otherwise claimed.
Martin added: “The day you get your PPI payout is the time it counts, the tax year it counts.
“So, if you’ve got a payout in the 2016/17 tax year, and you can only go back four years, you only have until April 5 this year to claim that.
“If you have your PPI payout even from a couple of years ago you can go back four years.
“It is worth doing this now, checking this now, or you could be missing out on big money. It is extremely simple to do.”
The method Martin has explained to Britons is one which is tried and tested as a success.
In fact, one person wrote into the show to explain their experience with claiming tax back from their PPI payout.
The individual named Sarah-Ann said: “Thanks Martin, I sent in an R40 form as you suggested, and have recently got £888 tax back from my PPI payout. Thank you.”
The R40 form mentioned by Martin is formally known as ‘Claim a refund of income tax deducted from savings and investments’.
This can be found on the Government’s official website to help people with the process.
However, as Martin highlighted, the process can often be complicated, and so taking one’s time on the matter will be essential.
Individuals who are still uncertain should be able to contact HMRC to find out more and gain further guidance.
Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to email@example.com. Unfortunately we cannot respond to every email.