PPI tax help

Nearlyold

Barclays are correct to deduct 20% tax from the Statutory compensation of £1101.31. The compensation represents 8%pa simple interest on the PPI premiums paid.

Tax is not charged on the refund of interest for the simple reason that it's a REFUND of money you've paid in interest. For the same reason - you are not taxed on the refund of PPI premiums paid

On your self assessment return you enter the Statutory compensation of £1101.31 and the tax you have already paid in the appropriate sections (assuming its not pre-filled with the info)

Dazed_and_confused

And don't forget any untaxed interest you receive from normal (non ISA) bank or building society accounts.