Automation of PPI taxed interest repayment applications

As a result, HMRC are trialling a new, automated process to speed up the processing of these claims. This was first published in Agent Update 93, but HMRC have asked us to specifically highlight this new process – and dedicated address for PPI tax on interest reclaims -  to members.

Currently, agents can only file R40 claims on paper which are processed manually. HMRC are looking address backlogs by introducing optical character recognition to speed up the process, however this does require agents (and taxpayers using the paper R40 form) to submit reclaims in a specific format, in order for the automated system to be able to handle them. HMRC are therefore asking agents to follow the steps outlined in Agent Update 93 and ensure that claim details are not included in cover letters or separate attachments. They are also asking that claims are only made in respect of PPI interest. Where an individual is reclaiming tax on other income sources as well as PPI interest, they should follow existing processes.

Text from Agent Update 93:

“HMRC has seen a significant increase in PPI taxed interest repayment requests from agents.

“To reduce the number of cases in our queues and speed up the processing time of applications we are developing an IT solution to automate the processing of some PPI taxed interest repayment applications. To make sure you get any repayments due as soon as possible we need you to submit all applications using the following guidance:

• individual applications should be submitted for each tax year on the existing standard R40 form
• do not include any other tax reclaim types within that R40 form
• only Include the agent details on the spaces provided on the R40 form
• do not include covering letters
• post the claims to the new dedicated PPI tax interest reclaims address:

PPI tax interest claims

HM Revenue and Customs

BX9 1ZR

“The automated service is reliant on receipt of a standard application. We expect automation of these forms to begin in late Spring.

“Any applications not received in the correct format will not go through automation and will take longer to process.”

Further details on the background to reclaiming tax on the interest element of PPI claims can be found on the LITRG website.

If you have any further comments or queries, please let us know. We are aware that the R40 does not allow for taxpayers to include their bank details to receive a payment direct to their bank and this has already been raised with HMRC in a recent call.