A PPI tax refund partly includes an interest payment at a rate of 8% of your PPI refund total. The interest element of your PPI refund is taxable (not your PPI refund) with 20% tax usually deducted automatically before you receive your refund.

• A refund of the actual PPI premiums paid
• Interest (if the PPI was added to your loan)
• Statutory Interest (also referred to as compensatory interest)
• You only need to declare the Statutory Interest part of your PPI payout on your Tax Return.