Monument refund.

[ostell]

My daughter had a card with Monument and out of the blue a letter arrived saying they were going to give her some money back. Great, she is happy with this. Anyone know what triggered this?

However in the list of items used in their calculation one line stood out. This was a deduction of income tax for one of the items

Payment Break Plan Charges £xxxx
Default Fee Charges £xxxx
Account Rate Interest £xxxx
8% Statutory Compensation £700.65
Less Income Tax at 20 % £140.13

I would have thought that statutory compensation would have been a "without tax" amount. Any one got any ideas if it should be tax free or not?

Edit: Found it was a form of PPI

[Amethyst]

Re: Monument refund.

It is standard to pay the tax at source, if she doesn't pay tax then it should be refunded to her by HMRC. Great to hear Monument is refunding pro-actively.
[MENTION=189]Turboman[/MENTION]

[ostell]

Re: Monument refund.

I can understand the paying of tax from interest earned but this is stated as compensation. I suppose this could be classed as interest on the money that should have not been paid and being refunded.

Waiting for the cheque to arrive and be cashed and then query how long the period has been, 6 years or more.

[Turboman]

Re: Monument refund.

Here's a link from FOS re statutory interest

http://www.financial-ombudsman.org.u...edress_a4.html

Some firms deduct the tax at source--some don't

If you don't pay tax--claim it back by writing to HMRC

If you pay tax at the "higher rate"--keep stum!--lol

BTW--the 8% rate was in fact 15% prior to 1st April 1993