ex gratia offer

boristbear

First Direct have offered my friend 4.5k (full ammound including interest) as goodwill gesture on ex gratia basis re PPI claim. She would be happy with the amount but she is self employed and not earning much. If this gets included in her tax return and her profits go up as a result she would lose a significant amount of tax credits. Would this happen? It doesn't seem fair as all the money this is refunding had already been subject to tax anyway. Can someone let me know what the tax implications of accepting such an offer might be?

thanks.

marshallka

boristbear wrote: »

First Direct have offered my friend 4.5k (full ammound including interest) as goodwill gesture on ex gratia basis re PPI claim. She would be happy with the amount but she is self employed and not earning much. If this gets included in her tax return and her profits go up as a result she would lose a significant amount of tax credits. Would this happen? It doesn't seem fair as all the money this is refunding had already been subject to tax anyway. Can someone let me know what the tax implications of accepting such an offer might be?

thanks.

Hope this helps

http://www.hmrc.gov.uk/bulletins/tb72.htm#1

di3004

marshallka wrote: »

Hope this helps

http://www.hmrc.gov.uk/bulletins/tb72.htm#1

Great link Marshallka.:T;)