my Barclaycard charges court claim- *WON + Comp INT**

[Noumidia]

I don't know they sold the debt to Lowell , I still owe 770 to D/C not to Barclaycard

[Noumidia]

Barclay they made me another offer and I have till 18/11/2013 to accept it the offer is made of the original charges + interest However, barclays saying

1) I need to pay income tax on the interest that I have claimed as it's compensation payment. Therefore barclays will deduct 20% from the interest awarded.

2) The settlement sum will also cover any other claims may be said to arise out of the same fact.

 

Can I I deal with the tax myself?

I don't understand what do they mean the second condition?

 

Any hep will be appreciated as I have only few days to make a decision.

[AndyOrch]

1) PPI payouts are usually formed from three elements.

 

The first two constitute the compensation. They are:

 

A refund of the premiums paid

Interest you have paid on the premium

The third part is additional interest on the compensation at 8% per annum (not compounded, so no interest on interest). It is this part that is taxed.

 

Tax is owed for the tax year you are paid compensation in.

 

Who owes tax?

 

Interest on PPI compensation is treated the same way as savings so all taxpayers who are paid additional interest will owe tax.

 

This is because the idea of compensation is to put you in the place you would have been had you not been mis-sold.

 

Had you not paid out the PPI premiums it is assumed you'd have that cash in the bank. Additional interest is paid as compensation as it is assumed you'd get a return on that money in the bank.

 

Therefore, it is taxed as a savings account would be.

 

However, interest is not always paid on credit card PPI redress. Where it is not paid there is no tax owed.

 

How do I know if I've been paid interest?

 

It should be split out from the compensation on your redress offer letter from your lender.

 

How much tax will I owe?

 

You pay savings tax, and hence PPI tax, depending on what tax band you're in from your earnings.

 

A basic rate taxpayer (who pays 20% tax), for instance, will pay £20 for every £100 in interest.

 

Won't tax be automatically deducted?

 

Some providers deduct basic rate tax at source but you'll need to check, as if they don't, or if you owe more than they deduct, you'll have to organise a payment yourself (see below for how to pay).

 

Of the major banks, only RBS and Natwest deduct tax. Barclays (including Barclaycard), Halifax, HSBC, Lloyds TSB and Santander do not deduct tax.

 

If tax is deducted at 20%, higher and top rate payers will need to make a top-up payment.

 

What if I got a refund years ago?

 

You must declare any tax paid within the last six tax years, says HM Revenue & Customs (HMRC).

 

Many PPI reclaims will go back to 2006, while the bandwagon picked up momentum in 2007 when we launched our PPI reclaiming campaign, so most will owe tax as the majority of payouts happened over the past six years.

 

How do I pay tax owed?

 

If you owe money and you are an employee, let HMRC know by contacting your tax office or call its income tax helpline on 0845 300 0627.

 

It can then readjust your tax code, which lowers your personal tax-free allowance, so the additional cash can be collected via your wage packet.

 

If you fill out a self assessment form, you must declare any interest as savings interest on that form and pay money owed as part of your overall tax bill.

 

If you cannot afford to pay, contact HMRC as it can give you more time in exceptional circumstances.

 

 

2) Simply means that the settlement is in F&FS no further claims can come from this matter.

 

Regards

 

Andy

[Noumidia]

Thanks Andyorch for the detailed explanation, by the way my claim is to do with credit card charges no PPI .I do understand that same rules are applied when it come to the tax. At the moment, I am unemployed it is possible to claim the deducted tax back or tell

barclaycard not to deduct the tax and i will take full responsibility regarding the tax issue.

2) I do have another barclaycard (visa) with a lot of charges over the years, does it means I am not allowed to file a claim?according to their second condition (see #52).

3) They also mentioned, barclaycard bought back the debt from Lowell group . Therefore they will deduct an £xxx from the settlement. My question do I need to see the evidence of their purchase as I have seen a case in this site one of the member had a similar case, BC deduct an amount from the settlement money and when he checked his credit file he found that the debts was reported by DC as not settled.

[AndyOrch]

If you dont pay taxt then tell them that ...as I stated above they dont deal with tax deduction...bit of a porky there.

 

If you have a further claim...under a different card/account number ...then no the above is nothing to do with that only this account number.

[Noumidia]

Hi Andyorch

they want me to sign the agreement offer and notice of discontinuance, so when do I have to sign the notice (N279) ? After I receive I receive the money ?

[AndyOrch]

Just sign the agreement offer and cover letter that you will submit the N279 (you are the claimant) on receipt of their payment.

[Noumidia]

Ok, Andyorch thanks for your help. I will email barclay litigation department and state my condition of the offer:

 

1) I am not a tax payer and if the deduct the tax from the compentiation,they need to send me a tax certificate of payment.

2) The payment shoul be made as cheque and not in the barclaycard A/C.

3) Wipe out any data on my credit file relating to barclaycard debt.

4) Not*to set off the £xxx in respect of an account which you sold to a third party (lowell). The amount you repay to me will be used to clear debts owed to creditors on a pro-rata basis at my discretion.

 

My point is they sold my A/c to DC for a fraction of the value of the original debt and set off in account book as bad debt for tax purposes. Now they are saying the brought it back and the wanted to set it off against the settlement.

 

"The authority for my views is the case of Edlington Properties v. Fenner & Co. Ltd [2005] EWHC 2158 (QB) which affirms this position that the assignor has no right of set-off to a third party (assignee) for a damages claim brought against it post-assignment, as any equitable set-off in this regard is personal in nature and the debt sold is not transferred subject to it."

Any comment or I am pushing my luck?

Edited November 14, 2013 by Noumidia
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[Noumidia]

Ok, Andyorch thanks for your help. I will email barclay litigation department and state my condition of the offer:

 

1) I am not a tax payer and if the deduct the tax from the compentiation,they need to send me a tax certificate of payment.

2) The payment shoul be made as cheque and not in the barclaycard A/C.

3) Wipe out any data on my credit file relating to barclaycard debt.

4) Not*to set off the £xxx in respect of an account which you sold to a third party (lowell). The amount you repay to me will be used to clear debts owed to creditors on a pro-rata basis at my discretion.

 

My point is they sold my A/c to DC for a fraction of the value of the original debt and set off in account book as bad debt for tax purposes. Now they are saying the brought it back and the wanted to set it off against the settlement.*

 

"The authority for my views is the case of Edlington Properties v. Fenner & Co. Ltd [2005] EWHC 2158 (QB) which affirms this position that the assignor has no right of set-off to a third party (assignee) for a damages claim brought against it post-assignment, as any equitable set-off in this regard is personal in nature and the debt sold is not transferred subject to it."

Any comment or I am pushing my luck?

[AndyOrch]

3 will happen if no balance remains after settlement.

[Noumidia]

I did check my credit file and there is no entries relating barclays card, therefore I shouldn't worry about the 3rd condition.

[AndyOrch]

Then dont include it.

[Noumidia]

Hi

I just would like to thanks all CAG members who helped with this claim.The barclays credit card payed all my charges with compound interest, their terms was to keep the detail of settlment confidential.

[citizenB]

Hi

I just would like to thanks all CAG members who helped with this claim.The barclays credit card payed all my charges with compound interest, their terms was to keep the detail of settlment confidential.

 

Thanks for updating best you can, Noumidia - a lot of the banks are including confidentiality clauses now.

[AndyOrch]

Well done Noumidia

 

Delighted that this has been resolved to your satisfaction.

 

Regards

 

Andy