Martin Lewis shares urgent deadline warning for people who go PPI payouts

Many people who claimed back Payment Protection Insurance (PPI) could be owed even more money.

However, there isn't much time left to claim back the extra cash due to UK tax rules. Martin Lewis explained in this week's episode of his ITV show that the tax year is coming to an end in just over a couple of weeks.

Because of this, any tax reclaims for the tax year of 2019/20 will become invalid in the new tax year as there is a four-year limit on the reclaims. Therefore, anyone owed extra money from PPI taxing only have a little bit of time to go through the complex forms to claim it back.

Read more: Martin Lewis says 'it feels good' after widow 'woke up with £35,000' in her bank account

Martin explained: "The PPI reclaiming deadline was August 2019. So that 2019/20 tax year we're about to lose was massive for PPI reclaiming, now when you got PPI paid back, you were paid back what you paid in.

"This is the crucial bit, they added an 8 per cent statutory interest...which counts as savings interest for tax purposes. So when you got that extra on top, and it could have been a lot of money, it counts like savings interest.

"Yet since 2016, we've all had this personal savings allowance, which means if you're a 20 per cent taxpayer, you can earn a grand a year of interest without paying tax on it. If you're a 40 per cent taxpayer you can earn £500 of interest."

Martin added that only a few people paid tax because they had the earnings threshold. Despite this, PPI automatically had 20 per cent taken off which means people were taxed when they shouldn't have been.

He continued: "In which case, it is the year of your payout that counts for tax purposes. So many people, because of that 2019/20 is disappearing, you need to do this