In the latest news from the world of the payment protection scandal, it has been revealed that some of the payments repaid by banks to those eligible for the repayments in the first place may end being subject to taxes. This could mean that those who have received PPI money from the financial institutions may lose some of the funds they have waited so long to receive.
It is worth noting, however, that the tax is only likely to be charged on the interest of the repayments that those who have claimed (likely after using a PPI calculator ), and not on the sum itself. The government have stated that this is likely to be a flat tax of 8% on the interest – interest which firms such as the financial ombudsman have been trying to obtain on behalf of consumers in compensation for the long delays that they suffered, as well as the practise of mis-selling in the first place.
The payment protection scandal has been one of the most significant financial problems to take place in the UK for decades, with over £3 billion currently being estimated as being owed by the banks to consumers as a result of their being mis-sold the insurance. Intended as cover for a loan or credit card should the possessor become unable to work, it was mis-sold to consumers as being either a non-optional part of obtaining a credit agreement (it wasn’t) or was sold to those who would actually be inelligible to claim on the policy (such as the self-employed).
It is becoming clear either way that there are many consumers out there who seem destined to consistently become the victim of one type of administration or the other, even if they do end up obtaining the full repayment from the bank. At least the main sum cannot be taxed!
