Affordability complaint win - what tax do I pay?

GeekieGirlie

I had two loans with Lendables that won affordability claims. They never sent a detailed breakdown of the refund just that they removed charges and interest and give refund of 8% simple interest. 

They added “We've deducted income tax at the basic rate from the interest included in the refund” 

So does that mean I’ve paid all my tax on that or do I still need to add it to a self assessment and declare it even though already paid tax?

I am employed full time normal tax rate  but also registered for self Assessment for my side hustle but the last few years thats never gone over £1k so I’ve not had to file one for the last few years. 

I’m not even sure how I break the parts down that I received to see what the interest was I got. I never got a breakdown but this is what they refunded:

Loan 1

Borrowed £2000-£2145 with their fees

Made 38 payments out of 60 of £73.77

44.2% interest. 

Paid £2803.26

Refunded £852.69

Loan 2 

Borrowed £2000 - £2058 with their fees. 

Made 15 payments out of 60 of £78.12

48.9% 

Paid £1171.80

Reduce Balance now £828.20

So do I need to declare the amount in my next return or have I already paid it all? If I need to pay something how do I work out what I owe? 

sourcrates

GeekieGirlie said:

“We've deducted income tax at the basic rate from the interest included in the refund” 

So does that mean I’ve paid all my tax on that or do I still need to add it to a self assessment and declare it even though already paid tax?

What it says on the tin, tax has already been deducted for you, 

GeekieGirlie

sourcrates said:

GeekieGirlie said:

“We've deducted income tax at the basic rate from the interest included in the refund” 

So does that mean I’ve paid all my tax on that or do I still need to add it to a self assessment and declare it even though already paid tax?

What it says on the tin, tax has already been deducted for you, 

Great thank you ☺️ 

ManyWays

If you ask Lendable, they have to provide details of the amount of 8% interest added and the tax they have deducted.

The 8% amount is treated by the taxman as interest you are getting on savings.
Your side hustle income is not relevant.

If you are a basic rate taxpayer, you won't have to pay any more tax, but you may be able to reclaim up to £200 a year of tax that was deducted. This is explained in this article https://blog.moneysavingexpert.com/2019/04/martin-lewis--had-a-ppi-payout---if-so-you-can-reclaim-the-tax-o/

GeekieGirlie

ManyWays said:

If you ask Lendable, they have to provide details of the amount of 8% interest added and the tax they have deducted.

The 8% amount is treated by the taxman as interest you are getting on savings.
Your side hustle income is not relevant.

If you are a basic rate taxpayer, you won't have to pay any more tax, but you may be able to reclaim up to £200 a year of tax that was deducted. This is explained in this article https://blog.moneysavingexpert.com/2019/04/martin-lewis--had-a-ppi-payout---if-so-you-can-reclaim-the-tax-o/

Thank you. I will have a look at that too.