Tax bill for PPI

Krissystorme

Hello can someone help me please.? I have been given a tax bill for the total cost of a PPI payout but I only received 60% the company took the other 40%.  The inland  revenue have billed me for the total amount which will cripple me as they are reducing my tax code by 7,900 making my tax code 585!!!  I really do not understand this hidden tax that I am being pursued for what do I do? Help!

[Deleted User]

You're taxed on the statutory interest element of the full redress. It's not the total redress itself.

Any amount you agreed to pay a claims company needs to be funded by you.

Perhaps post some detailed figures.

molerat

Filled in SA and declared the whole amount of the payout instead of just the interest ?  That is the usual cause of these problems.

Dazed_and_C0nfused

Krissystorme said:

Hello can someone help me please.? I have been given a tax bill for the total cost of a PPI payout but I only received 60% the company took the other 40%.  The inland  revenue have billed me for the total amount which will cripple me as they are reducing my tax code by 7,900 making my tax code 585!!!  I really do not understand this hidden tax that I am being pursued for what do I do? Help!

As others have said the tax owed is likely to be down to how you have competed the R40 form.

A lot of people receiving PPI refunds don't seem to have understood this and end up owing tax because of mistakes they have made.

If you post details of what you included on the R40 and which tax year it was for then it should be possible to point you in the right direction.

dunstonh

I have been given a tax bill for the total cost of a PPI payout but I only received 60% the company took the other 40%.  

As you chose to pay a claims company rather than do it free of charge, what you pay the claims company is irrelevant in terms of tax.    You pay tax on the interest element of the PPI redress.   Not the capital (refund) element.

I really do not understand this hidden tax that I am being pursued for what do I do?

It isn't hidden.    The bank/lending firm that paid the PPI out would have broken it down for you on their complaint outcome letter.


Did you tell HMRC that you had PPI interest paid?   Did you only tell them about the interest element or the full amount?  
Did you fail to tell HMRC of an old PPI payout and they have found out about it and are charging you penalty interest on it? (which can double the amount owed)