PPI Reclaiming discussion Part III

marshallka

Richard_Kenyon wrote: »

wasn,t sure how to deal with this but was advised to e-mail my name and contact number to [EMAIL="info@my-financeuk.com"]info@my-financeuk.com[/EMAIL]. they rang me back and put me intouch with a company who are dealing with my claim. Its very simple and if true i stand to get all my ppi payments back plus interest but just feel that its one of those too good to be true things. time will tell.

:spam: :spam:

pinknico

Morning Marshallka, where do we stand on the tax issue on statutory interest and goodwill?

di3004

Morning Marshallka & Pinknico

Hope your okay hunni.;)

Will be posting shortly.:D x

di3004

marshallka wrote: »

It doesn't matter if I was working or not in "then". It states on HMRC that its the year in which the interest is paid that matters.

I am so annoyed at this and need to find the correct legalisation for this as I do not want a tax bill landing with our names on it in a couple of years when the banks give the lists of peeps to the inland revenue. I have to find it where "GOODWILL" payments you do not have to pay on..

This is off CAG



Re: Important Information Regarding Tax On Interest
An important good news update to the above.

We are continuing to research this issue and we have identified a further important point.

Where a payment is received in settlement of a claim that is specifically stated to be a "goodwill gesture" (ex gratia) as opposed to an out of court settlement we have been advised that none of this payment is taxable nor need it be declared to the Inland Revenue.

Its in one hand and basically taken out the other........:mad: :rolleyes:

pinknico

Morning Di, I am very well though will be even happier when Picture are in
DEFAULT, I wish an insider would come on this site and give us a clue as to when this might be.:D

di3004

pinknico wrote: »

Morning Di, I am very well though will be even happier when Picture are in
DEFAULT, I wish an insider would come on this site and give us a clue as to when this might be.:D

Hiya hun, its taking time isn't it, going back on their paperwork which you would have received too from the FSCS it states something like 6 months, think it was July time that both you and me had filled these forms in and returned to them, so 5 months gone already....... , hope you hear very soon hun.

Yes it would help if an insider could post on here about this.:D lol

marshallka

pinknico wrote: »

Morning Marshallka, where do we stand on the tax issue on statutory interest and goodwill?

Its here I found the legalisation from a HMRC document so let me know your thoughts here

Ex-gratia or voluntary payment: It is sometimes suggested
that an interest addition is not taxable because it, or the
compensation on which it is calculated, is paid “ex-gratia” or
voluntarily. We accept that a truly voluntary payment cannot
be interest, even if described as such, because the essential
feature of an entitlement to it is absent. In practice, however,
we consider it will be extremely rare for any payment arising
from claims that a financial product has been mis-sold to be
truly voluntary, since the redress is given in consideration of
the complainant giving up a right of action

di3004

marshallka wrote: »

Its here I found the legalisation from a HMRC document so let me know your thoughts here

Ex-gratia or voluntary payment: It is sometimes suggested
that an interest addition is not taxable because it, or the
compensation on which it is calculated, is paid “ex-gratia” or
voluntarily. We accept that a truly voluntary payment cannot
be interest, even if described as such, because the essential
feature of an entitlement to it is absent. In practice, however,
we consider it will be extremely rare for any payment arising
from claims that a financial product has been mis-sold to be
truly voluntary, since the redress is given in consideration of
the complainant giving up a right of action

I would not have known anything about this matter Marshallka if it wasn't for you, I still think its wrong though and why on earth did we now know about these issues before...... , like I said its given in one hand and taken back out of the other !

marshallka

I have just had this from the adjudicator though...

I sought clarification from Co-op regarding the redress it is going to pay to you. It said:

"The payment to Mrs will be made gross and she will need to declare this to her local Tax Office if she is a tax-payer, which is what we advised her in our letter of 2 December 2008.
With regard to Mrs comments about no tax being due on the payments, I can advise that the offer to refund PPI premiums was made as a gesture of goodwill, however, any payment made in respect of interest is not classed as a goodwill payment and is liable to basic-rate tax. I don't understand Mrs comment about never seeing anyone being taxed on statutory interest as all interest payments are liable to basic-rate tax."

It is also my understanding that there is a potential tax liability for the payment of interest. You may wish to clarify this issue with the Inland Revenue. We have no idea of your personal tax situation and therefore cannot advise you of whether there is a liability on your part. You need to discuss this matter with the Inland Revenue.The issue you have raised below is also something that you will need to take up with the Inland Revenue. We do not give advice on tax matters.
Yours sincerely

and yet on HMRC document here
http://www.hmrc.gov.uk/bulletins/tb72.pdf

Ex-gratia or voluntary payment: It is sometimes suggested
that an interest addition is not taxable because it, or the
compensation on which it is calculated, is paid “ex-gratia” or
voluntarily. We accept that a truly voluntary payment cannot
be interest, even if described as such, because the essential
feature of an entitlement to it is absent. In practice, however,
we consider it will be extremely rare for any payment arising
from claims that a financial product has been mis-sold to be
truly voluntary, since the redress is given in consideration of
the complainant giving up a right of action

di3004

marshallka wrote: »

I have just had this from the adjudicator though...

I sought clarification from Co-op regarding the redress it is going to pay to you. It said:

"The payment to Mrs will be made gross and she will need to declare this to her local Tax Office if she is a tax-payer, which is what we advised her in our letter of 2 December 2008.
With regard to Mrs comments about no tax being due on the payments, I can advise that the offer to refund PPI premiums was made as a gesture of goodwill, however, any payment made in respect of interest is not classed as a goodwill payment and is liable to basic-rate tax. I don't understand Mrs comment about never seeing anyone being taxed on statutory interest as all interest payments are liable to basic-rate tax."

It is also my understanding that there is a potential tax liability for the payment of interest. You may wish to clarify this issue with the Inland Revenue. We have no idea of your personal tax situation and therefore cannot advise you of whether there is a liability on your part. You need to discuss this matter with the Inland Revenue.The issue you have raised below is also something that you will need to take up with the Inland Revenue. We do not give advice on tax matters.
Yours sincerely

and yet on HMRC document here
http://www.hmrc.gov.uk/bulletins/tb72.pdf

Ex-gratia or voluntary payment: It is sometimes suggested
that an interest addition is not taxable because it, or the
compensation on which it is calculated, is paid “ex-gratia” or
voluntarily. We accept that a truly voluntary payment cannot
be interest, even if described as such, because the essential
feature of an entitlement to it is absent. In practice, however,
we consider it will be extremely rare for any payment arising
from claims that a financial product has been mis-sold to be
truly voluntary, since the redress is given in consideration of

the complainant giving up a right of action

So basically then you get the refunds but have to sort this out with the Inland Rev yourself........