Can Redress Companies Claim Their 24% fee pre-tax

grahamm123

Hi all, hope you can help please?
A Redress company has been managing my PPI claims and are charging me the maximum allowed of 24%
Are they allowed to charge 24% before tax as that would mean they are getting more than 20% of my award? For example, if I have a topline winn of £10,000 they want 24% which eqautes to £240.00. When my award comes through from RBS, the will have deducted 20% tax at source, so I would get £800.00, which meams the redress company are receiving more than the maximum 24%. Is that allowed, or should I query it with them?
Any help asap would be very much appreciated please?

Dazed_and_confused

It would be £2,400 not £240 :eek:

You probably need to look at your contract.

But at face value if your award is £10,000 then the fee would be £2,400.

An expensive stamp.

To compensate you may well be entitled to a refund of some or all of the tax deducted. Unless you have signed away that to another company as well. Which wouldn't be unheard of.

-taff

grahamm123 wrote: »

Are they allowed to charge 24% before tax as that would mean they are getting more than 20% of my award?

Yes, they are. You're paying VAT for their 'service'
This is anther reason why we always tell people not to use one.

[Deleted User]

grahamm123 wrote: »

Are they allowed to charge 24% before tax as that would mean they are getting more than 20% of my award?

They can now "only" charge 20% of any award, but this is bumped up to roughly 25% by the VAT you have to pay. The Claim Company don't receive the VAT, the government do. You then have to pay Income tax on the full interest amount.

By the way, 24% of £10k is not £240, it's £2,400! :eek: