Help after ppi now have a huge tax bill

Mellyhen

A year Go my husband used a finance company to see if we had any ppi as many of our friends had had successful claims. We did it & had a very successful claim. The company were very thorough dealt with the award sorted the tax & took their cut of course! A year later we have a letter from HMRC says we owe them a huge amount of underpaid tax . After a chat on the phone it turns out it was the ppi award, not enough tax was paid on it leaving a shortfall owing to HMRC.
NOW what I want to know is do I have a right to complain to the finance company to get the money from them maybe as we paid them for a service they didn’t fulfill they made a mistake working out the tax ,are they liable do I have any rights?

[Deleted User]

The company wasn't responsible for 'sorting tax'.

You are.

[Deleted User]

Mellyhen wrote: »

The company were very thorough dealt with the award sorted the tax & took their cut of course!

How did they "sort the tax"? You employed them to represent you in a PPI complaint, nothing else.

Mellyhen wrote: »

A year later we have a letter from HMRC says we owe them a huge amount of underpaid tax .

So they didn't "sort out" the tax at all

Mellyhen wrote: »

do I have a right to complain to the finance company to get the money from them maybe

No

Mellyhen wrote: »

as we paid them for a service they didn!!!8217;t fulfill they made a mistake working out the tax ,are they liable do I have any rights?

The only "service"you paid for was for them to send your mis-selling complaint. They don't work out the tax, nor do they pay it. Their bill is a percentage of the total redress before tax.

Why do you repeatedly refer to the firm as a "Finance" company when they are Claims Management? A finance company loans money.

Regardless, only you are liable to pay the tax.

Sorry.

dunstonh

The company were very thorough dealt with the award sorted the tax & took their cut of course!

CMCs dont do that. Beyond posting the initial letter, the next thing they focus on is collecting their cut. They have no contact with HMRC. The only indirect thing is that the CMC fee is subject to VAT.

A year later we have a letter from HMRC says we owe them a huge amount of underpaid tax . After a chat on the phone it turns out it was the ppi award, not enough tax was paid on it leaving a shortfall owing to HMRC.

Which suggests you are a higher rate taxpayer. So, interest should be declared to HMRC.

NOW what I want to know is do I have a right to complain to the finance company to get the money from them maybe as we paid them for a service they didn!!!8217;t fulfill they made a mistake working out the tax ,are they liable do I have any rights?

CMCs are not finance companies. They are bored mums ands students cold calling people misselling their services for doing the exact same thing you can do in 5 minutes yourself.

CMCs also cannot circumvent UK tax law.

I suspect you are mixing up the VAT you paid on the CMC bill with the income tax you owe on the interest element of the redress. These are two different things.

The CMC is not responsible for your tax bill.

Mellyhen

Ok I am a little confused as no one else who used this company have had this happen . HMRC Told me themselves that some tax was taken but not enough it was incorrectly calculated! We didn’t do it so who did?

Mellyhen

The letter I received from them stated the award then what we will receive less tax which is what we got, then their invoice to pay them their cut including vat. I’m not clever about any of this at all so this is why I asked the question for help not to be made to feel stupid for my mis understanding of how these companies work, my mistake calling them finance company but their name has finance in the title.

Mellyhen

Some tax was paid we didn’t do it so who did?

Mellyhen

Some tax was paid, who did that it wasn’t us!

Mellyhen

Sorry new to this forum getting muddled how to use it

TrickyDicky101

What are the exact figures and the breakdown between tax, CMC fee and what you actually received?

Are either you or your husband higher rate taxpayers?

Mellyhen

I don’t earn enough to pay tax, I don’t believe my husband is high rate tax payer either not on his pitiful pay!