News - Higher Tax Rate PPI Claimants To Be Scrutinised By HMRC
Higher rate taxpayers have been the primary focus of recently updated tax advice on PPI compensation.
An 8% interest payment on PPI refunds was approved by the Financial Services Authority (FSA) in order to resolve any potential loss associated with the money paid out in mis sold PPI, such as an inability to invest.
This further complicates the whole PPI refund process, which, according to missoldppiclaims.info, is already too tricky for many people to manage on their own: “It’s no surprise that lenders make it difficult for people to claim back money which is owed to them,” said a spokesperson for the leading PPI claims management company. “While it is true that the more financially savvy people can navigate their way through the PPI reclaim process, they don’t always secure the sizeable pay-out they are entitled to.
“This move by the HMRC muddies the waters even more meaning some borrowers may decide not to even bother claiming when they’re actually entitled to quite a hefty sum. All we are saying is the process can be made significantly easier by letting an expert make the claim on a client’s behalf.”
While paying out for PPI only served to undermine the financial positions of small investors, arguably higher rate taxpayers may have been more likely to have accrued interest on money invested, hence the recent move by the HMRC.
In some instances, as the tax paid on the PPI compensation interest is due in the same tax year the refund is made, lenders deduct the tax from the refund. But, without the help of a claims advisor or accountant, some claimants may not know that they must declare the interest on their refund.
“It may now seem unjust to many consumers that the Treasury will benefit greatly as a result of PPI compensation, given that they already feel aggrieved at being left short after having paid out more than they needed to for such a length of time,” continued missoldppiclaims.info. “A further three million borrowers are thought to be due a PPI refund with 8% interest, and the HMRC will be in line for a sizeable chunk of this.
“Amidst all this, however, it is clear that the true culprits in all this are the financial institutions who saw fit to con their customers into taking out PPI and still have the cheek to dig their heels in when perfectly justified claims come their way.”
Over recent years, millions of pounds of compensation have been paid to unsuspecting borrowers who were mis sold PPI while applying for a credit card, loan or mortgage either online, over the phone or face-to-face. The scale of PPI mis selling is thought to have been so widespread that around 70% of the UK’s adult population has needlessly made regular payments to such a policy at one time or another.