PPI compensation & tax/benefits

spaniel-lover

I am on ESA (support group), from April I will receive £130.65 pw, I just received compensation from Barclays bank for PPI relating to the years 1997 to 1999, they sent me a cheque for £927.13, I then had to pay the third party company who handled it a fee of £254.41, Barclays bank deducted income tax of £132.92 automatically before sending me the cheque, seeing as I do not pay income tax due to being on benefits am I entitled to claim back the £132.92 from HMRC or should I just leave it?

[Deleted User]

If you're below the threshold, you can reclaim it.  The interest part of the redress is treated as income, so you may need to declare that in case it impacts your benefits.