Taxman to benefit from PPI claims

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I can't find that this has been discussed here so a new thread.

It seems that most of those in receipt of misselling monies have been paid the interest gross and either told to pay a certain amoutn of tax to the tax man or have just been given the money and nothing said.

I can see most people chosing to ignore this and hope they get away with it.

Will the tax man get the records so they can go directly after the people or will they rely on honesty?

This isnt a how can I get out of the tax thread as I have never taken a loan or anything that could be construed as mis-sold.

To my mind it would have been a hell of a lot easier to just get the financial companies to do the tax and pay it over at basic rate. Let the higher rate payers do the top up as part of their return, which a high percentage will of course do and the non tax payers claim it back.
 
The really worrying thing is that some financial instititutions seem to be taxing at source, whereas others aren't which will no doubt lead to confusion.

Reading the article on the BBC I couldn't believe the cheek and arguably ignorance of this woman:

"The customers were wrongly sold PPI in the first place so why should we have to pay anything at all?"

Get over yourself woman, not only have you got a full refund on the PPI that you may or may not have chosen to take out has it not been mis-sold, you've got a staggering EIGHT PERCENT interest at a time when the base rate has been 0.5% for years and you've then got the bare-faced cheek to object to paying tax on that 8% interest!

If I had my way, I'd say fine then, if you don't want to pay tax, we won't give you any interest.
 
Get over yourself woman, not only have you got a full refund on the PPI that you may or may not have chosen to take out has it not been mis-sold, you've got a staggering EIGHT PERCENT interest at a time when the base rate has been 0.5% for years and you've then got the bare-faced cheek to object to paying tax on that 8% interest!

If I had my way, I'd say fine then, if you don't want to pay tax, we won't give you any interest.
What has the base rate got to do with it? Does all investment return 0.5% interest? You have been deprived of money for a period of time and statutory interest (which, by the way, doesn't compound) is designed to cover the potential of that money. Imagine that you paid £2,000 extra for PPI that you didn't need, and then had to borrow money at a later date at a rate of 11.9% APR; even with 8% statutory you'd be massively out of pocket.
 
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What has the base rate got to do with it? Does all investment return 0.5% interest? You have been deprived of money for a period of time and statutory interest (which, by the way, doesn't compound) is designed to cover the potential of that money. Imagine that you paid £2,000 extra for PPI that you didn't need, and then had to borrow money at a later date at a rate of 11.9% APR; even with 8% statutory you'd be massively out of pocket.

not to add the base rate back when these claims are from probably wasnt 0.5% either
 
I would imagine that if we're aware or this, then the taxman is as well, and will likely request the relevant info from the businesses that they expect will be paying this kind of interest.
 
not to add the base rate back when these claims are from probably wasnt 0.5% either

Indeed, however I considered that and the base rate hasn't been 8% for nearly 20 years now, certainly long before the period these PPI claims will cover. In fact rates have been so low for so long that to get an effective rate of 8% over say I don't know, the past say 8 years you'd have been doing fairly well in terms of normal savings considering rates have been under 6% for over 10 years now. Fair point about the impact had people had to take out additional loans in the meantime (at 'high' rates) but if you go down that route there is a massive can of worms relating to what impact a missing £2000 may or may not have made to people's lives in the interim.

I knew when I put that 0.5% in it might be a bit inflammatory, it wasn't intended to suggest that 0.5% would be a fair amount of interest to cover the period, just pointing out that the base rate has been low for a sizeable chunk of it :)
My issues isn't with the fact that people are getting an interest payment, it is with the idea that they shouldn't have to pay tax on it.
 
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Fair point about the impact had people had to take out additional loans in the meantime (at 'high' rates) but if you go down that route there is a massive can of worms relating to what impact a missing £2000 may or may not have made to people's lives in the interim.

I knew when I put that 0.5% in it might be a bit inflammatory, it wasn't intended to suggest that 0.5% would be a fair amount of interest to cover the period, just that it would be a sizeable chunk of it :)
My issues isn't with the fact that people are getting an interest payment, it is with the idea that they shouldn't have to pay tax on it.
The big can of worms has been resolved by the 8% statutory interest that has been implemented in law. I guess you would be free to claim further damages if necessary? The people making these claims should be asking for what they feel is an appropriate sum based on the impact of being without it including a consideration for the tax they will pay.
 
Thinking about it, as soon as the companies paying this interest file their corporation tax return claiming a hulking deduction for these claims and the interest, HMRC will enquire and get the info that way. The way it usually works is that if the cost is tax deductible at one end, it's also taxable at the other end. HMRC will chase it as soon as they see the deduction without the accompanying forms for tax deducted at source.
 
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