PPI repayment taxable?

Lorriex

I understood from various sources that any PPI award was not treated as taxable by HMRC.
I notified Tax credits of a repayment just to make sure, and am now in an unpleasant overpayment spat with them. Clarification anyone? Please.

Rainbowgirl84

Lorriex wrote: »

I understood from various sources that any PPI award was not treated as taxable by HMRC.
I notified Tax credits of a repayment just to make sure, and am now in an unpleasant overpayment spat with them. Clarification anyone? Please.

Only the interest is taxable.

SonOf

Lorriex wrote: »

I understood from various sources that any PPI award was not treated as taxable by HMRC.
I notified Tax credits of a repayment just to make sure, and am now in an unpleasant overpayment spat with them. Clarification anyone? Please.

The capital part of the redress is not taxed (the refund element). However, the interest is.

Lorriex

Thank you Rainbowgirl and SonOf for your replies. The problem is that HMRC are saying that PPI repayment is 'income' which affects Tax credit award.

Dazed_and_confused

I understood from various sources that any PPI award was not treated as taxable by HMRC.
I notified Tax credits of a repayment just to make sure, and am now in an unpleasant overpayment spat with them

.

That may have been your undoing. If you have included it on your renewal HMRC will presumably consider it to be taxable income.

It might be worthwhile posting on the Benefits & Tax Credits board, specifically about what you can do if you have declared income in error on your tax credits renewal?

Lorriex

Thank you, will look into that.