Interest received on Payment Protection Insurance (PPI) claims is taxed at source at the basic rate meaning non-taxpayers have to submit a repayment request to HMRC. Due to the level of claims received, HMRC is developing a new automated process for dealing with these requests.

In the meantime, HMRC advise that agents can facilitate the automated process by submitting  individual applications for each tax year using the existing ‘Claim a refund of Income Tax deducted from savings and investments (R40) form’ and by:

  • Not including any reclaims for any other types of income within the R40 form; a separate form should be used for other types of repayment claims.
  • Only include agent details on the spaces provided on the R40 form.
  • Not include a covering letter.
  • Posting the claims to the following new PPI tax interest reclaims address:

PPI tax interest claims, HM Revenue and Customs, BX9 1ZR.

HMRC has said that applications not submitted in accordance with these guidelines will not go through the automated process meaning repayments will take longer.

Source: ICAEW Taxline May 2022

Useful guides on this topic

Savings income: How interest is taxed
What is savings income? How is savings income taxed? What allowances are available? 

External link

Claim a refund of Income Tax deducted from savings and investments (R40) 

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