Tax on compensatory payment

DrFergals

I am aware that I am liable for the tax on the 8% interest that is paid, and one PPI settlement (loan end 1999) the interest is £2,183.70. So ~£440 due in tax.

Question is about three other loans that are even older. Bank claims no records and I have none, so offering £1200 settlement on each. The letter is different to the main one as no breakdown of the figures, and no mention of tax implications.

So am asking is the 3 x £1200 taxable in anyway?

Fingers crossed its not, as my tax is complicated enough this year, made redundant with no notice period, and now working again but at a much lower salary and in dispute with tax man on tax for mileage expenses from 2010/2011.

amersall

These are goodwill gestures and they wont pay you the 8%,so breath a sigh of relief,it is only the 8% you pay tax on.

DrFergals

Thanks - just the sort of news I wanted to hear.