refund from barclays

commsrep

I have just successfully claimed back my ppi from Barclays for a personal loan i finished paying for last april, I have today recieved a cheque for £3984.38p from them, and I first wrote to them in may this year and it has only cost me the price of 2 first class stamps and months of letters from them saying things like they have 16 weeks in which to reply and once upheld the had 40 days in which to send me my refund, everytime they gave me a deadline date they went right through to that date as today was the 40th day that they had to refund it. its a long wait but you get there in the end so keep at it!!!

In the letter i got today which my nice big fat cheque it states
" PLEASE NOTE THAT THE 8% PER ANNUM SIMPLE INTEREST PAYMENT HAS BEEN MADE GROSS AND THEREFORE NO DEDUCTION HAS BEEN MADE FOR INCOME TAX IN ACCORDANCE WITH CURRENT INCOME TAX REGULATIONS, HOWEVER THE PAYMENT IS TAXABLE"

It then goes onto say that i need to contact the tax office to inform them.

Does everyone have to pay tax on their refunds? and if so why?
Please help

di3004

commsrep wrote: »

I have just successfully claimed back my ppi from Barclays for a personal loan i finished paying for last april, I have today recieved a cheque for £3984.38p from them, and I first wrote to them in may this year and it has only cost me the price of 2 first class stamps and months of letters from them saying things like they have 16 weeks in which to reply and once upheld the had 40 days in which to send me my refund, everytime they gave me a deadline date they went right through to that date as today was the 40th day that they had to refund it. its a long wait but you get there in the end so keep at it!!!

In the letter i got today which my nice big fat cheque it states
" PLEASE NOTE THAT THE 8% PER ANNUM SIMPLE INTEREST PAYMENT HAS BEEN MADE GROSS AND THEREFORE NO DEDUCTION HAS BEEN MADE FOR INCOME TAX IN ACCORDANCE WITH CURRENT INCOME TAX REGULATIONS, HOWEVER THE PAYMENT IS TAXABLE"

It then goes onto say that i need to contact the tax office to inform them.

Does everyone have to pay tax on their refunds? and if so why?
Please help

Hi

Well done and Congratulations on your success!

If you post on the above ppi reclaim/discussion thread you will get some answers on there, and there are others posts on there that will explain this.

DrSqueeze

commsrep wrote: »

It then goes onto say that i need to contact the tax office to inform them.

Does everyone have to pay tax on their refunds? and if so why?
Please help

Well done on getting your refund :beer::j

As for tax, if you are a UK taxpayer then the 8% interest part is taxable in the same way as most other interest you get from a bank (i.e. at 20%).

However, the rest of the payment (the refund part) is not taxed as that's simply a refund of money you've already spent.