Check for tax owed on PPI mispayments
Tax on interest could be due on PPI repayments, warns HMRC
CLAIMANTS who won payment for mis-sold payment protection insurance (PPI) will have to pay tax on the interest earned, according to HM Revenue & Customs.
Billions of pounds have been set aside by banks after the FSA won a judicial review forcing them to pay out on mis-sold PPI claims. HMRC, on BBC Radio Four’s Moneybox programme, said that had the money not been used on PPIs, then it would have been taxable if invested in a savings account.
Individuals would have to check whether the banks had automatically deducted tax on interest.