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  • FIRST POST
    • Kjb42
    • By Kjb42 13th Apr 18, 11:56 PM
    • 1Posts
    • 0Thanks
    Kjb42
    PPI refund and tax
    • #1
    • 13th Apr 18, 11:56 PM
    PPI refund and tax 13th Apr 18 at 11:56 PM
    Iíve just had a PPI refund off a credit card.
    However on the breakdown of the claim x amount has been paid for tax.
    Iím a little confused as to why Iíve 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 wasnít 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 Iíve probably already been taxed on.
    At the end of the day what Iím saying is why am I having to pay money out when I was basically robbed of money by the bank?
Page 1
    • Moneyineptitude
    • By Moneyineptitude 14th Apr 18, 12:01 AM
    • 22,649 Posts
    • 12,185 Thanks
    Moneyineptitude
    • #2
    • 14th Apr 18, 12:01 AM
    • #2
    • 14th Apr 18, 12:01 AM
    wondering why I should be paying tax on compensation that I deserve?
    Originally posted by Kjb42
    If you are are a taxpayer, you pay tax.

    Sorry.
    • TrickyDicky101
    • By TrickyDicky101 14th Apr 18, 7:03 AM
    • 3,213 Posts
    • 2,120 Thanks
    TrickyDicky101
    • #3
    • 14th Apr 18, 7:03 AM
    • #3
    • 14th Apr 18, 7:03 AM
    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
    • Moneyineptitude
    • By Moneyineptitude 14th Apr 18, 8:25 AM
    • 22,649 Posts
    • 12,185 Thanks
    Moneyineptitude
    • #4
    • 14th Apr 18, 8:25 AM
    • #4
    • 14th Apr 18, 8:25 AM
    You only pay tax on the interest element of any compensation you receive and not the refund of the original PPI you paid.
    Originally posted by TrickyDicky101
    I think the OP is clearly referring to the compensation element rather than the refund element of the redress when he says;
    wondering why I should be paying tax on compensation that I deserve?
    Originally posted by Kjb42

    I agree he should investigate the possibility of HMRC refunding the tax though....
    • TrickyDicky101
    • By TrickyDicky101 14th Apr 18, 11:26 AM
    • 3,213 Posts
    • 2,120 Thanks
    TrickyDicky101
    • #5
    • 14th Apr 18, 11:26 AM
    • #5
    • 14th Apr 18, 11:26 AM
    Paying one's legal dues of tax is a biatch ain't it? ;-)
    • scarletmead
    • By scarletmead 25th Apr 18, 1:44 PM
    • 2 Posts
    • 0 Thanks
    scarletmead
    • #6
    • 25th Apr 18, 1:44 PM
    • #6
    • 25th Apr 18, 1:44 PM
    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
    • By TrickyDicky101 26th Apr 18, 12:25 PM
    • 3,213 Posts
    • 2,120 Thanks
    TrickyDicky101
    • #7
    • 26th Apr 18, 12:25 PM
    • #7
    • 26th Apr 18, 12:25 PM
    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
    Originally posted by scarletmead
    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
    • By delerium 26th Apr 18, 6:20 PM
    • 225 Posts
    • 228 Thanks
    delerium
    • #8
    • 26th Apr 18, 6:20 PM
    • #8
    • 26th Apr 18, 6:20 PM
    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 donít want to have pay tax on the interest or compensation twice which is where I am currently!
    • seasider007
    • By seasider007 1st Jul 18, 2:10 PM
    • 609 Posts
    • 5,411 Thanks
    seasider007
    • #9
    • 1st Jul 18, 2:10 PM
    • #9
    • 1st Jul 18, 2:10 PM
    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
    • By philharnott 10th Oct 18, 7:10 PM
    • 17 Posts
    • 1 Thanks
    philharnott
    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.
    Originally posted by TrickyDicky101
    Did you mean c £300 ie the £298.04?
    • societys child
    • By societys child 10th Oct 18, 7:23 PM
    • 5,679 Posts
    • 6,362 Thanks
    societys child
    Did you mean c £300 ie the £298.04?
    Originally posted by philharnott
    Another old post this time from last April . .

    • Moneyineptitude
    • By Moneyineptitude 10th Oct 18, 7:52 PM
    • 22,649 Posts
    • 12,185 Thanks
    Moneyineptitude
    Another old post this time from last April . .
    Originally posted by societys child
    To be fair, this is the second time it's been bumped since then.
    • philharnott
    • By philharnott 10th Oct 18, 8:12 PM
    • 17 Posts
    • 1 Thanks
    philharnott
    Another old post this time from last April . .
    Originally posted by societys child
    Would be grateful for your view on this. A neighbour had a little under a thousand pounds of tax deducted from his 8%. He's a basic rate payer and he's just showed me a cheque from HMRC for whole sum.
    • Moneyineptitude
    • By Moneyineptitude 10th Oct 18, 8:14 PM
    • 22,649 Posts
    • 12,185 Thanks
    Moneyineptitude
    Would be grateful for your view on this.
    Originally posted by philharnott
    I recommend you learn how to start a new thread, Philhanott. It's really not difficult and you will garner far more relevant replies than bumping ancient threads.

    Thanks.
    • philharnott
    • By philharnott 10th Oct 18, 8:27 PM
    • 17 Posts
    • 1 Thanks
    philharnott
    I recommend you learn how to start a new thread, Philhanott. It's really not difficult and you will garner far more relevant replies than bumping ancient threads.

    Thanks.
    Originally posted by Moneyineptitude
    I recognise the experience and knowledge of you & SC and would value your view/opinion/answer.
    • Moneyineptitude
    • By Moneyineptitude 10th Oct 18, 8:30 PM
    • 22,649 Posts
    • 12,185 Thanks
    Moneyineptitude
    I recognise the experience and knowledge of you & SC and would value your view/opinion/answer.
    Originally posted by philharnott
    Please start your own thread and elaborate therein what you want us to comment on.
    • philharnott
    • By philharnott 13th Oct 18, 9:12 AM
    • 17 Posts
    • 1 Thanks
    philharnott
    Please start your own thread and elaborate therein what you want us to comment on.
    Originally posted by Moneyineptitude
    Quite straightforward: Neighbour had all tax deducted refunded by HMRC - £990+ - so why the reference to c £200 in the April post when deducted figure is almost £300? Simple question really.
    • Nasqueron
    • By Nasqueron 13th Oct 18, 8:16 PM
    • 6,210 Posts
    • 3,788 Thanks
    Nasqueron
    It's almost certainly a typo


    You are taxed 20% on the 8% interest refund element, you can claim the lot back if you have earned less than £1000 in interest over the year
    • philharnott
    • By philharnott 20th Oct 18, 4:01 PM
    • 17 Posts
    • 1 Thanks
    philharnott
    It's almost certainly a typo


    You are taxed 20% on the 8% interest refund element, you can claim the lot back if you have earned less than £1000 in interest over the year
    Originally posted by Nasqueron
    My neighbour = 1 PPI loan complaint upheld and refund made & about £4800 is ( clearly detailed ) 8% of statutory interest & a tax deduction on that of £960. He has no other forms of savings & earned income is less than his tax free allowance. MSE and others, including HMRC, indicates that the ceiling for return of tax for him - and us all - should be £200. He thinks they've refunded £760 too much and that's how it seems to me. Just looked at his P60 for 17/18 - his PPI refund was in Feb - and total taxable emoluments is £11489.67.
    Last edited by philharnott; 20-10-2018 at 4:19 PM.
    • Dazed and confused
    • By Dazed and confused 3rd Nov 18, 9:44 PM
    • 3,314 Posts
    • 1,678 Thanks
    Dazed and confused
    It sounds like your neighbour will have been able to utilise the savings starter rate of tax where upto £5,000 of savings interest is taxed at 0% (the Personal Savings Allowance only kicks in after this).

    If their only taxable non savings income (wages, pension etc) was the £11,489 then they would have had the full £5,000 savings starter rate available (plus £11 unused Personal Allowance).

    They wouldn't actually have enough income to even be able to use the Personal Savings Allowance tax rate (also 0%).

    This assumes they got the standard Personal Allowance of £11,500 i.e. hadn't applied for Marriage Allowance or claimed any expenses etc (tax code on P60 would normally be 1150L).
    Last edited by Dazed and confused; 03-11-2018 at 9:53 PM.
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