Shop Direct PPI Calculations

emsjune78

Hi All,

I've recently dealt with a Shop Direct complaint on behalf of my Mum. We've received a letter today confirming the complaint is being upheld and a cheque will follow in 21 working days.

The total premiums paid were £483.06 and the simple interest at 8% per annum has been calculated at £196.86. The two together is the amount payable less 20% income tax on the interest sum so a final total of £640.55.

I was under the impression that interest was calculated from the date of the last premium paid until the current time - is this not the case for catalogue ppi? The policy was added in 1998 and the account closed in 2004.

Many thanks

amersall

Did they have all the statement information, or your Mum, from the opening of the account?, if not then they pay from the earliest records that exist.

If the PPI monthly amount was small or, decreased with the balance and as the 8% decreases each month from the start date to the date you get redress, the PPI was only paid for 6 years, this may be why the 8% seems a small amount.

If your Mum is a non taxpayer then contact HMRC to get the tax back.
https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-deducted-from-savings-and-investments-r40
Only claim for the 8% interest and not the whole PPI amount, put the amounts in the right columns.

[Deleted User]

emsjune78 wrote: »

I was under the impression that interest was calculated from the date of the last premium paid until the current time

It should be. You should query this with the bank.

amersall wrote: »

If your Mum is a non taxpayer then contact HMRC to get the tax back.
https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-deducted-from-savings-and-investments-r40
Only claim for the 8% interest and not the whole PPI amount, put the amounts in the right columns.

Yes, claiming for the whole PPI amount would likely result in a new tax bill rather than a refund.

emsjune78

Thank you both for the advice. I'd not even thought about claiming the tax back and I'll ring them on Monday to query how they've calculated the 8% as there's no breakdown. We don't have all of the paperwork, just some statements and letters. I know that the account was definitely closed in 2004 and they confirmed that the policy was added in 1998. I'll see what they say.