Does income tax have to be paid on PPI reclaim?

zaksmum

My friend has just been paid £8500 reclaimed PPI plus interest.

She says she's been told she has to pay income tax on this. Is this correct?

-taff

If she pays tax, she has to pay tax on the interest portion.

zaksmum

Thanks for that taff.

jaynemacdonald1979

Sorry to hijack i too was wondering. For instance i got £3185 ppi. Interest i think was £400 or so how much roughly should go to the tax man from that?

Sarros

jaynemacdonald1979 wrote: »

Sorry to hijack i too was wondering. For instance i got £3185 ppi. Interest i think was £400 or so how much roughly should go to the tax man from that?

Hi we recently had our PPI complaint upheld

PPI premium £2472
Interest on this to date £853
8% interest £1723

Total £5094

Of which £344 was deducted automatically for tax. Leaving us with £4704 actually received.

Not sure if this helps

If you pay tax just ring your local tax office and let them know I think they will adjust your tax code to cover it.

-taff

20 % will go to the taxman, unless you haven't reached your taxable limits.