PPI Reclaiming successes and failures 9 August 2007 at 5:10PM edited 6 June 2012 at 6:58PM in Reclaim PPI & Other Insurance 37.7K replies 7.7M views

goatfaced

I just got some money back from Barclaycard. I'm a reclaim newbie, I put in a claim before the deadline and got lucky.
I'm a bit confused as Martin says on TV that they pay tax on the interest, but they have charged me tax on the compensation which they call 'statutory compensation' and is almost three times as much as the interest (3029.90 compared to 1092.28). 
Is this correct? I've filled in an R40 form as best I can but am wondering if this means I won't get it all back (605.98 tax paid).
I can't predict for certain whether or not I'll be a taxpayer this year or not. I'll probably earn roughly around the threshold, if that changes the answer. Thanks in advance for any advice that anyone can give. 
 

zx81

Yes, it's correct.  Tax has been deducted from the statutory interest, which you can claim back if you're under the threshold.

A higher rate tax payer would have additional tax to pay.

[Deleted User]

goatfaced said: they have charged me tax on the compensation which they call 'statutory compensation' and is almost three times as much as the interest (3029.90 compared to 1092.28). 

The "statutory compensation" is 8% simple interest and  it's only the actual refund of the PPI you paid which is not taxed. 

goatfaced

Thanks,
I've read the letter again and it's made more sense now. They say I paid both PPI and also interest on that PPI. There are no records so it's all just averaged amounts. 

So the compensation is the 8% interest. It wasn't very clear to me because of the word 'interest' being used elsewhere, my head's a bit fuzzy with a cold. Thanks for helping out. I've asked for the interest back anyhow and it's a fabulous windfall at what's a tricky time financially for many people. I'm so grateful for this site, been reading it for years.    

[Deleted User]

goatfaced said: I've asked for the interest back anyhow and it's a fabulous windfall .    

You won't get the interest back, but you may get back the tax  you paid on that interest....

goatfaced

Moneyineptitude said:

goatfaced said: I've asked for the interest back anyhow and it's a fabulous windfall .    

You won't get the interest back, but you may get back the tax  you paid on that interest....

That's what I meant, oops!