PPI refund and tax

Options
Kjb42
Kjb42 Posts: 1 Newbie
in Reclaim bank & credit card charges
I’ve just had a PPI refund off a credit card.
However on the breakdown of the claim x amount has been paid for tax.
I’m a little confused as to why I’ve had to pay tax?
I was mis sold the PPI, got in debt because of the credit card and payments and just wondering why I should be paying tax on compensation that I deserve?
It wasn’t my fault what the banks did and got up to,so why am I being made to pay more money or taxed again on money I’ve probably already been taxed on.
At the end of the day what I’m saying is why am I having to pay money out when I was basically robbed of money by the bank?
«1

Comments

  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Options
    Kjb42 wrote: »
    wondering why I should be paying tax on compensation that I deserve?
    If you are are a taxpayer, you pay tax.

    Sorry.
  • TrickyDicky101
    TrickyDicky101 Posts: 3,513 Forumite
    First Anniversary First Post
    Options
    You only pay tax on the interest element of any compensation you receive and not the refund of the original PPI you paid.

    Depending on your own circumstances you may well be able to reclaim the tax deducted from HMRC by completing form R40:

    https://www.gov.uk/apply-tax-free-interest-on-savings
  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Options
    TrickyDicky101 wrote: »
    You only pay tax on the interest element of any compensation you receive and not the refund of the original PPI you paid.
    I think the OP is clearly referring to the compensation element rather than the refund element of the redress when he says;
    Kjb42 wrote: »
    wondering why I should be paying tax on compensation that I deserve?


    I agree he should investigate the possibility of HMRC refunding the tax though.... :)
  • TrickyDicky101
    TrickyDicky101 Posts: 3,513 Forumite
    First Anniversary First Post
    Options
    Paying one's legal dues of tax is a biatch ain't it? ;-)
  • scarletmead
    scarletmead Posts: 2 Newbie
    Options
    I have a received a refund worded as below .......How do i put this down on the R40 form Helpppp

    A. REFUND OF PAYMENTS MADE BY YOU FOR PPI £584.33
    B. REFUND OF INTEREST CHARGED ON PPI PREMIUMS £396.49
    C.STATUTORY COMPENSATION £1.490.20

    INCOME TAX DEDUCTION £298.04

    TOTAL REFUND PAYABLE = A+B+C-TAX £2,172.98

    I am going around in circles on this one
  • TrickyDicky101
    TrickyDicky101 Posts: 3,513 Forumite
    First Anniversary First Post
    Options
    scarletmead wrote: »
    I have a received a refund worded as below .......How do i put this down on the R40 form Helpppp

    A. REFUND OF PAYMENTS MADE BY YOU FOR PPI £584.33
    B. REFUND OF INTEREST CHARGED ON PPI PREMIUMS £396.49
    C.STATUTORY COMPENSATION £1.490.20

    INCOME TAX DEDUCTION £298.04

    TOTAL REFUND PAYABLE = A+B+C-TAX £2,172.98

    I am going around in circles on this one

    Haven't looked at form R40 but the gross income on which you have suffered tax is C (Statutory Compensation) of £1,490.20.

    The tax deduction of £298.04 is 20% of this Statutory Compensation. Roughly, if you don't have taxable interest income from other sources you should be able to reclaim c.£200 of what you have suffered.
  • delerium
    delerium Posts: 226 Forumite
    Options
    Totally agree with you OP

    I no longer live in the UK and no longer pay UK tax - yet I have had 3 rather large ppi claims paid out and have paid around a grand in tax to hmrc. I have tried to claim this back and hmrc claim ignorance! Going to try the form mentioned above though so wish me luck since I don’t want to have pay tax on the interest or compensation twice which is where I am currently!
  • seasider007
    seasider007 Posts: 633 Forumite
    First Post First Anniversary
    Options
    I've contacted HMRC in the last couple of weeks regarding claiming back tax on my PPI payouts as I'm an expat, I've been told to fill in form R43:)
    Best wins 2010 - Ipod touch, Ipad, W/end in Amsterdam, 32" TV & Bluray, V Fest tix X 4, Global Gathering Tix, £100 M&S vouchers
  • philharnott
    philharnott Posts: 17 Forumite
    Options
    TrickyDicky101 wrote: »
    Haven't looked at form R40 but the gross income on which you have suffered tax is C (Statutory Compensation) of £1,490.20.

    The tax deduction of £298.04 is 20% of this Statutory Compensation. Roughly, if you don't have taxable interest income from other sources you should be able to reclaim c.£200 of what you have suffered.
    Did you mean c £300 ie the £298.04?
  • societys_child
    societys_child Posts: 7,110 Forumite
    First Anniversary Name Dropper First Post
    Options
    philharnott wrote: »
    Did you mean c £300 ie the £298.04?
    Another old post :huh: this time from last April . .
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards