Martin Lewis warns millions are owed £100 in PPI payouts – check 2 crucial details

MARTIN Lewis has shared an urgent warning as hundreds of millions could be owed in PPI tax payments.

The Money Saving Expert shared his useful information on tonight’s episode of The Martin Lewis Money Show on ITV.

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He has issued an urgent reminder regarding tax refunds and PPI tax refunds.

“When you got PPI back, you got back what you put into it, but they added a so-called statutory interest rate of 8 per cent, which counts as savings interest for tax purposes,” Mr Lewis explains.

This amount of money is automatically debited – while many people do not have to pay it.

If tax is due on PPI payouts, most companies will automatically deduct this at the basic rate of 20 percent before you receive the money.

But when the personal savings allowance was introduced in April 2016, many people had to pay back taxes.

“It means if you’re a 20 percent taxpayer, you can make a thousand dollars a year without paying taxes on it. If you are a 40 per cent taxpayer, you could earn £500 a year from it,” the MSE explains.

However, since the PSA was introduced, many people have still had their 20 percent PPI tax amount automatically deducted.

“This means that most people should not have been taxed on it, but were taxed. In that case, the year of your payout counts.”

It means that if your PPI payout was substantial, you could owe thousands.

For example, if the total PPI recovery was £15,000, approximately £1,470 could have been withdrawn over a ten year period.

How to reclaim the tax

Do you think you are entitled to a tax refund? Then use the ‘Reclaim income tax refund withheld on savings and investments’ R40 form government.uk.

This is an R43 form if you live abroad.

Mr. Lewis advised checking your paperwork for the payout date and tax paid.

You cannot reclaim any tax you received before April 6, 2019.

If you were paid in the 2019/2020 tax year, this means you only have three and a half weeks to submit your claim.

This comes as the MSE revealed a trick that could see you get as much as £500 into your bank account from energy companies.

In an episode of the Martin Lewis Money Show Live, the savings expert shared the handy hack.

He also shared how to become debt-free faster by using 0 percent balance cards. Here’s what you need to know.