Paying tax on ppi refund interest

Pleaseadvise

In the last few months my husband and I have made complaints for mis-sold PPI and as you can see from my signature four out of five have been upheld.

In two cases the company has taken the tax on the 8% interest out for us. That leaves us needing to contact the taxman and pay the tax on the other two. We are waiting for a payment that was supposed to be here by now - if they don't pay us by April, do we still pay the tax this year? We have the details of the amounts and the interest.

jimmo

That seems to be a tricky question. Interest is normally assessable when you become entitled to it That is normally expressed as the earlier of when it is paid to you or credited to your account.

Therefore if it suits your own purposes you would be justified in saying that the interest has been credited to your account now and the tax is due for 2012/13. If not you would be equally justified in saying that the tax is due for the year that you actually receive the money.

Incidentally, my wife’s offer from MBNA included net interest, not gross but that only became clear when she received the cheque and the tax deduction certificate in the same envelope.

Have you seen this?

http://www.hmrc.gov.uk/news/ppi-advice.htm

Pleaseadvise

Thank you. We'd rather pay the tax amount soon so we aren't tempted to spend it!