ppi and tax

silverknowes

hello there ive just recieved an offer from my bank regarding am i right in saying that i pay 20% tax on the total of 8% interest thingy that is show on the breakdown that they send you as ive 8 claims all into one do i total 8x the 8% intrest thingy then divide by 5 and that will give me total for the tax man and when do i pay and how dont want him deducting anything from my monthly wage i would rather give him 1 payment



kind regards silverknowes:T:T:T:beer:

DrSqueeze

Hi,

If you're a basic rate taxpayer, then you do indeed pay 20% of the total interest the bank pays you (the 8% part).

The refund of your PPI premiums (and any refund of interest you paid to the bank) is not taxable, as it's just a refund of your money.

If you complete a tax return then you include the untaxed interest on your form. If not, contact your tax office and inform them how much untaxed interest you have received, they can then make arrangements for you to pay the necessary tax.

Important: double check to make sure the bank has paid you GROSS (i.e. that they haven't already deducted the tax, which some do).

And congratulations on your success :beer:

silverknowes

thanks i will contact bank of scotland later today just waiting for cheques now

DrSqueeze

I hope they come quickly

I'd wait until you've got the money before telling the taxman, otherwise he might ask for his cheque before you get yours!

maggy50

silverknowes wrote: »

thanks i will contact bank of scotland later today just waiting for cheques now

I think you might find that they will deduct 20% so there will not be an issue, check the paperwork they send you.

dilus

silverknowes wrote: »

thanks i will contact bank of scotland later today just waiting for cheques now

I received a refund from Bank Of Scotland and they normally DON'T pay the tax for you, you have to contact HMRC and tell them the 8% figure you have received, they will then send you a payment slip to return with a cheque