We will pay the refund directly to your First Trust Bank account or, if you no longer bank with us, we’ll send a payments letter to you, or the CMC, along with a cheque. (If it is a joint refund the cheque will be made payable to both parties). We aim to do this within the time frame stated in our offer.
From October 2013, tax laws changed and HM Revenue & Customers (HMRC) requirements means we must deduct income tax at the basic rate (currently 20%) from any interest paid. HMRC treat the additional payment which relates to the 8% compensatory interest as taxable income.
If we deduct more tax than you have to pay you may be able to reclaim some or all of the tax deducted from HMRC, however if you pay tax at rates higher than the basic rate any additional tax due on this should be discussed with your tax office.
For more information or help on PPI tax advice please call the HMRC tax helpline on 0300 200 3300.