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Ppi and tax


johnny
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I thought I'd have a go at this Ppi job and have received some money. I went through one of these ppi firms. 

They have charged me their % on the full amount before Hmrc have taken their bit, is this right. I have no problem paying them but should it not be after tax? 

Anyone one got any views? Yes I know I should of done it myself

 

cheers John

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Just now, ferguson_tom said:

Why are you paying tax on it?

Because it is subject to Income Tax at 20%, and if your a higher rate payer then it has to be declared too

Your effectively gaining from the interest- and just like any normal savings account ( except an ISA) , your required to pay 

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43 minutes ago, Jaymo said:

Your effectively gaining from the interest- and just like any normal savings account ( except an ISA) , your required to pay 

So shouldnt you just be paying tax on the interest not what you originally paid in?

Maybe one of the other benefits of just doing it yourself you get a cheque from the company who mis-sold you the ppi and it just goes straight into the bank account. I am sure thousands of people are unaware that you are meant to to declare it as income.

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You only have to pay TAX on any interest earned. The original sum plus the compensation are tax free. Not sure about what the firm can charge but it should be in their terms in black and white.

Some ppi companies already stop the TAX so I'd check thoroughly before paying anything.

It's definitely a should have done it yourself job.

Edited by Newbie to this
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