Tax on 8% interest

thunders79

Hi,

I've received a payment for misold PPI and wondered if someone could please explain the tax part of it.

I understand that HMRC treat the 8% interest part as taxable income. As a result, the bank have deducted 20% of the interest. However, although I work, I don't earn enough to pay tax. Does that mean that I am able to claim it back? if so, how do I go about doing that? I tried calling the tax office today but wasn't able to get through.

All advice appreciated.
Thanks :-)

Partridge89

You need to speak to HMRC I'm afraid, not sure if they have a quieter time?

Insider101

If you're still not over the tax threshold even taking into account the interest paid on your PPI then you should be able to get a certificate of tax deducted from the bank. Send a copy of this to HMRC and they should reimburse you. If you call the bank they should be able to advise on their procedure.

thunders79

Thanks for your replies. I will call them next week. It isn't a great deal of money, but it is better in my hands than theirs