The tax year end falls on Sunday April 5, 2020, meaning that from Monday April 6, the 2020 to 2021 tax year will begin. Ahead of the end of the 2019 to 2020 tax year ending, Martin Lewis has issued a reminder to members of the public.
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Writing in his weekly Money Tips email for Money Saving Expert, the financial journalist explained that people who have had a Payment Protection Insurance (PPI) payout since April 2015 may be due hundreds of pounds in tax back.
He said: “Many successful PPI claims have had tax automatically deducted, even though most people don’t need to pay it.”
As such, this means that millions of people are due their tax back.
However, it’s only possible to backdate tax reclaims by up to four tax years, Mr Lewis has explained.
The Money Saving Expert founder said that this means for 2015/2016 payouts, anyone who made a successful claim has until Sunday to claim the money back.
This reminder is for people reclaiming tax deducted from PPI claims that were paid out between April 6, 2015 and April 5, 2016.
However, it’s important to be aware that due to this tax year being the year before the Personal Savings Allowance was introduced, only non-taxpayers can reclaim from that year.
Another aspect of the tax year end to be aware of is that ISA allowances will reset from the start of the new tax year.
In the 2019 to 2020 tax year, the maximum a person can save in ISAs is £20,000.
There are four types of ISA (cash ISAs, stocks and shares ISAs, innovative finance ISAs, and Lifetime ISAs), and it’s only possible to put money into one of each kind of ISA each tax year.
There is also a limit on how much a person can pay into their Lifetime ISA, should they have one.
This is £4,000 per tax year, with this counting towards the overall £20,000 allowance.
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Earlier this week, Mr Lewis warned Lifetime ISA savers that the allowance is a ‘use it or lose it’ system.
As such, those wanting to make the most of their Lifetime ISA allowance in the 2019 to 2020 tax year have until midnight on April 5 to pay in up to £4,000 and thus get the 25 percent government bonus.
Jen Lloyd, savings expert at Skipton Building Society, commented: “For those with the goal of buying a first home, it makes sense to really make the most of the Lifetime ISA contributions before the tax year is up.
“The LISA comes with a 25 percent government bonus on whatever you save (up to £4,000) – so there’s up to £1,000 up for grabs.
“So if you have an account and you haven’t reached the £4,000 limit yet, deposit as much as you can before April 6 to benefit from the maximum government top up.
“For those that haven’t opened a LISA, but are considering doing so, now is smart time.
“By opening one now, you can still benefit from government bonus in the 2019-20 tax year, as well as the 2020-21 tax year too.
“And if you max out your LISA, this means you could receive government top-ups of up to £2,000 over the course of one calendar year (but, over two tax years).
“This can really stack-up towards a home deposit – but bear in mind, if you’re close to point of buying, you will need to have had your account opened for at least 12 months to make your first home purchase.”
More information on reclaiming PPI tax can be found by visiting Martin’s Reclaim PPI tax blog.
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