Taxed Again On Tax Rebate

[chrissa1]

Back in November I claimed the tax back on PPI payments I have received over the last few years. The amount was £1039.00.

I’ve just received a letter from them this morning telling me I owe £377.49 in unpaid tax on this money.

How can they repay me for tax paid and then ask for the tax to be paid on the amount they paid?

[AuntPollyGrey]

How can you claim Tax back on a payment? PIP payments are Tax Free.
PIP does not count as taxable income, so it has no effect on the amount of tax you pay. In this regard, PIP is the same as DLA, which is also tax-free income.

[chrissa1]

PPI, AuntPolly.

[AuntPollyGrey]

Chrissa -so very sorry for making that mistake! I can only suggest you call the HMRC customer service. I've always found them very helpful.

[Fitzer]

If your PPI refund was anything like mine it consisted of a payment for the payments you made and a sum for the interest you lost by not having those payments sitting in a savings account. In line with all such interest payments tax was due on that amount. My payer (NRAM, the defunct Northern Rock) deducted the tax due (basic rate) before sending it to me.

[chrissa1]

That’s what I was claiming for, Fitzer. As a non-taxpayer it shouldn’t have been taken off me by HMRC.

[Fitzer]

So this was your claim to HMRC for the tax automatically deducted? Possibly the interest amount tipped you over the taxable threshold? In any case if it's HMRC asking then talking to them is your best option.

[chrissa1]

Thanks. I’ve sent them an email query on the Government Gateway site. I should get an answer in 5 days.

Seems a bit stupid to me that they refund you something and then take some of it away. Why couldn’t they do the sum themselves and send the Nett balance?

[New Judge]

//Seems a bit stupid to me that they refund you something and then take some of it away. Why couldn’t they do the sum themselves and send the Nett balance?//

Oh chrissa, chrissa! Because it provides endless unproductive employment for countless numbers of scribes. It's rather like the great VAT employment scheme. Literally thousands of people employed (at the expense of the very people who are paying the tax) to administer a wretched system where companies pay tax to the Exchequer only to claim it back again a short time later. Takes lots of people to keep that going.

[chrissa1]

Grrrrr NJ. ;)

[Peter Pedant]

// Because it provides endless unproductive employment for countless numbers of scribes. It's rather like the great VAT employment scheme. //

well to answer the question - if you got the gross amount and PPI was tax free then it would count as income and taxed once. Insurance premiums were tax free at one point
dont know

I am taxed on a similar question - if you get a CCJ on unpaid rent do you pay the income tax on it, or is it as an award tax free ?
the answer seems to be some are and some arent

as for NJ ill judged remarks on VAT - ha!
it is self administered = that is the employer calculates it and submits it quarterly I think - and if you get it wrong you get slapped wivva penalty.- so it is part of accounting courses and NI and pension and PAYE

judges hey - do they live in the real world - no no dont answer that question !

[New Judge]

//...it is self administered//

Really Peter? So there are no VAT inspectors, then? Some 23,000 people work for HMRC and many of them are employed to administer VAT. I know of two VAT inspectors personally and I'm sure there's a few more as well as some more lowly scribes. Who do you think deals with VAT queries, enquiries and discrepancies?