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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
    • 20,947 Posts
    • 11,727 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
    • 3,128 Posts
    • 2,067 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
    • 20,947 Posts
    • 11,727 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
    • 3,128 Posts
    • 2,067 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
    • 3,128 Posts
    • 2,067 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
    • 608 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
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