Momo69 and PPI

[momo69]

Hi slick123,

 

I have been awarded PPI claim by my bank but on the letter they asking me to pay tax on the next year tax return -why should I pay tax on a money I have previously payed tax on ?

 

Should I claim any restitutionary damages?

 

please need some advise

 

Many thanks

[slick132]

Hi Momo,

 

I've moved your post into your own thread to avoid hijacking.

 

Is this a Woolwich a/c that you're talking about.

 

Please confirm exactly what the bank has said to you about tax.

 

I assume the matter of interest is addressed in the amount of the PPI refund. Are you not happy with the amount offered.

 

[momo69]

Hi slick132,

 

Thanks for your reply .

 

the original ppi was £1500 + interest incured due to ppi

£ 255+8% per annum simple interst £ 1082.92 so the total was 2828.91.

 

the letter is as follow :

 

please note that the 8%per annum simple interst payment has been made gross

and therefore no deduction has been made for income tax in accordance with current tax legislation .

 

however ,the payment is taxable so uk tax legislation requires you to include this amount on your tax return if you currently complete .

 

if you do not then you need to tell HMRC that you have received this payment.

any potential of tax liability as a result of this payment will be your responasability. end of letter.

 

I also hear that I could claim restitutionary damages is that possible.

 

the loan happen between feb/2003 and may 2006 the amount was 10k

 

Thanks for your advise

 

Much appreciated

[slick132]

If you want to claim restitutionary interest, you will probably have to file a formal court claim against the bank. This would be unwise if you've already got a reasonable offer from the bank.

 

Under UK law, the amount they pay you in simple interest (£1082.92) must be declared as Untaxed Interest in your Tax Return for the year ending 5th April 2013.