Tax Payment on ppi refund help!

nutty_nat

We are due to receive a ppi refund in two months time. It will be paid to us gross of tax. It is in joint names my husband is a 40% tax payer and I pay no tax at all as I do not work.

Does anybody know how to work out what tax we need to pay from our offer?

Total refund for the loan = £15,513.66
Interest Incurred due to ppi = £1,045.59
Value of 8% per annum simple interest payment = £4,326.27

Thank you for any advice.

ceeforcat

You will pay no tax if you do not work - your husband should pay about £209 (40%of half of the interest paid). Only the interest is taxable.

nutty_nat

ceeforcat wrote: »

You will pay no tax if you do not work - your husband should pay about £209 (40%of half of the interest paid). Only the interest is taxable.

Thank you for that.

ceeforcat

O.K. - it looks like the interest payment is £1045 per annum with the total interest paid £4326. The tax due would be £865.20 on your husband only - Sorry for confusion - didn't read whole post initially.

nutty_nat

Many thanks for that, better news than I thought.

ceeforcat

Fine - just to clarify - can you confirm the total amount received? I have also presumed that the £1045 is included in the £4326. I suppose it would be more exact to say that, whatever the interest received, 20% of it will be due in tax and all by your husband.

nutty_nat

ceeforcat wrote: »

Fine - just to clarify - can you confirm the total amount received? I have also presumed that the £1045 is included in the £4326. I suppose it would be more exact to say that, whatever the interest received, 20% of it will be due in tax and all by your husband.

You get interest incurred due to the PPi = £1,045.59
The 8% interest is a separate simple interest payment which is the £4,326.27.

They are both two separate figures, thank you for advice

nutty_nat

nutty_nat wrote: »

You get interest incurred due to the PPi = £1,045.59
The 8% interest is a separate simple interest payment which is the £4,326.27.

They are both two separate figures, thank you for advice

I have just been reading on my offer letter that it is only the 8% interest figure which is taxable. So this is the £4,326.27 figure.