Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

To assume that these consumers fall into a category of people who needed to borrow money is not factually correct.

It's not an assumption - PPI on unsecured loans is the largest market category by far and in fact four times larger than that of credit cards.

http://www.oft.gov.uk/shared_oft/inv...ns/payment.pdf

[skv123]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

It could be that i'm being incredibly harsh but people who were mis-sold PPI are in the vast majority people with very little knowledge and control of their finances.

As such the assumption that they are not savers sounds very much correct for the majority.

However, people like the ones on this forum may well NOW be much more clued up about their finance and be diligent savers who won't rush out and consume.

As a side note... Can you recommend me a decent savings account Bill?

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

For the avoidance of doubt, my comments related to credit card PPI.

The sale of general insurance was not properly regulated prior to the FSA taking over from the GISC, who in turn took over from the ABI.

Many many consumers were mis-sold this insurance, not because they had little knowledge or a lack of control over their finances. These very same people did not fall into a category of people who tended to save less or, lacked any financial savvy.

They were fooled by ingeniously written 'Limitation & Exclusion' clauses!

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

These very same people did not fall into a category of people who tended to save less......

''We [The Competition Commission] received some evidence from parties about the types of consumers most likely to purchase PPI. HSBC told us that PPI was more likely to be purchased by customers who.......had little or no savings''.

''HBOS told us that in 2005 the mean savings of a customer who purchased PPI were £1,093; and the mean savings of a customer who did not purchase PPI were £2,807.''

http://www.competition-commission.or...nd_app_2_6.pdf

[Bill-K]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Have I got this right, guys ? The FSA and HMRC have decided that the paltry 8% simple interest awarded as compensation in PPI claims is liable for income tax. Yes/No ?
Please tick the box, if yes...[_]

...and their reasoning is based on the presumption that the claimants would have invested this misappropriated money in savings accounts, or similar investments, had they not been unlawfully deprived of it. Yes/No ?
Please tick the box, if yes...[_]

Additionally, such people are being misled into believing that this 8% simple interest is a good rate of interest by the BBC, supported (albeit clearly uncomfortably !!!) by accountants Grant Thornton. Yes/No ?
Please tick the box, if yes...[_]

From the BBC “Money Box” programme, as linked to in above posts:-

A spokesman for HM Revenue & Customs told Radio 4's Money Box programme: "No tax is generally due on the repayment element of compensation paid to those mis-sold PPI. However, the additional interest is taxable - in line with other compensation claims."
They said that "Nobody should be worse off, as had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable.
Source: BBC News - Taxman to make money from Payment Protection Insurance

My own transcripted quotes from the recording of this programme:

Paul Lewis (talking to Mike Warburton, Tax Director at Accountants Grant Thornton of Gloucester): “This 8% rate of interest – and it’s a good rate – some might see that as compensation, but it is taxable.”

Mike Warburton: “Yes, it is a very good rate…”

Source: BBC iPlayer - Money Box: 12/11/2011

The FOS (and presumably the FSA reckon this, though:-

compensation for investment loss
Where we award compensation for an investment loss – typically because the consumer was put in the wrong product or account – the tax position depends on whether the consumer still has the wrong product or account

a) where the consumer still has the product/account The following cases are examples of compensation where we uphold complaints that the consumer was put in the wrong investment or account, which the consumer still has.
In cases like these:
the compensation we award is for investment loss. As in the examples above, this is usually based on what would otherwise have happened to the consumer’s money.
this kind of compensation is not usually subject to income tax, even if it is calculated by reference to an interest rate. And the law does not require a firm to deduct income tax at the basic rate.

b) where the consumer no longer has the product/account
In cases like these:
the tax treatment of the two parts of the compensation is likely to be different.
the compensation for the investment loss to the date the unsuitable investment was sold (or matured) is not usually subject to income tax - in the same way as explained in section 3(a) above.
Source: is compensation taxable?

So - the FSA/FOS and HMRC reckon that the claimant has been deprived of an investment opportunity by the mis-selling (and thus the mis-advising) of an insurance product - which resulted in their funds being mis-directed into a PPI scam, instead of the 'generous' alternative of an 8% simple interest savings account - according to BBC's Money Box programme (and presumably the FSA & HMRC) - Yes/No ?
Please tick the box, if yes...[_]
BUT - the FSA/FOS reckon that the 8% interest paid on such mis-directed investment advice is NOT taxable, it would seem - Yes/No ?
Please tick the box, if yes...[_]

Bill-K has NO idea what he's on about, but the FSA/FOC & HMRC do - Yes/No ?
Please tick the box, if yes...[_]

OK. So you ticked the last box...now tell me what I'm NOT understanding here, guys. One syllable at a time....perlease !!!

...not just for li'l ol' me - but for fellow apes the world over !!!

[debtisbad]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Have I got this right, guys ? The FSA and HMRC have decided that the paltry 8% simple interest awarded as compensation in PPI claims is liable for income tax. Yes/No ?
Please tick the box, if yes...[_]

...and their reasoning is based on the presumption that the claimants would have invested this misappropriated money in savings accounts, or similar investments, had they not been unlawfully deprived of it. Yes/No ?
Please tick the box, if yes...[_]

Additionally, such people are being misled into believing that this 8% simple interest is a good rate of interest by the BBC, supported (albeit clearly uncomfortably !!!) by accountants Grant Thornton. Yes/No ?
Please tick the box, if yes...[_]The FOS (and presumably the FSA reckon this, though:-So - the FSA/FOS and HMRC reckon that the claimant has been deprived of an investment opportunity by the mis-selling (and thus the mis-advising) of an insurance product - which resulted in their funds being mis-directed into a PPI scam, instead of the 'generous' alternative of an 8% simple interest savings account - according to BBC's Money Box programme (and presumably the FSA & HMRC) - Yes/No ?
Please tick the box, if yes...[_]
BUT - the FSA/FOS reckon that the 8% interest paid on such mis-directed investment advice is NOT taxable, it would seem - Yes/No ?
Please tick the box, if yes...[_]

Bill-K has NO idea what he's on about, but the FSA/FOC & HMRC do - Yes/No ?
Please tick the box, if yes...[_]

OK. So you ticked the last box...now tell me what I'm NOT understanding here, guys. One syllable at a time....perlease !!!

...not just for li'l ol' me - but for fellow apes the world over !!!

I live abroad and am not liable for income tax, although tax was deducted from my recent PPI settlement claim by Smile. Therefore, I have noted that when I do my tax return after April 5th, I will reclaim the tax deducted.

[Bill-K]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

I live abroad and am not liable for income tax, although tax was deducted from my recent PPI settlement claim by Smile. Therefore, I have noted that when I do my tax return after April 5th, I will reclaim the tax deducted.

You do that, DiB !!!
And also - those who have elected NOT to have their tax deducted at source, by submitting a signed 'R85' declaration to that effect.

I am not in the 'Fred Goodwin' income league - I am in the 'R85' category that many of us are in. But I am attempting to resist the 'thin end of the wedge' that the above discussion seems to show is being driven in.

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

For the avoidance of doubt:

Millions of people are facing an unexpected tax bill on their Payment Protection Insurance (PPI) refunds. The banking industry has set aside £6bn to pay for the mis-selling of PPI.

Customers were awarded refunds plus interest of 8% by the Financial Services Authority on the money they originally spent on PPI.

This interest will be subject to tax – earning the government tens of millions of pounds.

A spokesman for HM Revenue & Customs said: “No tax is generally due on the repayment element of refunds paid to those mis-sold PPI. However, the additional interest is taxable – in line with other refund claims.”

They said that “Nobody should be worse off, as had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable. Customers should check with their PPI provider as to whether tax has been deducted at source.”

Banks have said that they will not be deducting the tax at source; however, one bank said it will.

Loan companies are required to deduct the tax.

Confused customers



Banks have been writing to their customers explaining that they need to contact HMRC themselves to discuss what tax is due on the interest payments. This has left some customers confused.

Credit card customers do not automatically receive interest at 8%. They only receive this if the value of the PPI refund would have meant that they were in credit.

The government will be due a significant sum in tax: The refund will attract interest at a relatively high rate of 8%. This will be taxable and the government will expect to raise several hundred million pounds from this.

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

...had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable.

What a situation!'
What exactly are HMRC implying?

Or is it that the implication is the 'General Consumer' should have been clairvoyant?
But now knowing that they were total (how can I say it) mugs in believing the banks spin on the promised 'Peace of Mind' re: purchasing PPI, PPC or whatever name they chose to call this rip-off insurance?

HMRC, must also be clairvoyant if they believe that the 'General Consumer' could have would have invested this PPI/PPC cover into a saving s account.
Are they suggesting that we all abandon our contents insurance/ travel insurance should it fail.
Ooh, we should have paid the premiums into a savings account, instead of some naive attempt of protecting oneself against protection from the unexpected.

Credit card customers do not automatically receive interest at 8%. They only receive this if the value of the PPI refund would have meant that they were in credit.

I find it most interesting that many are not receiving full compensation from the banks RE: the interest that was charged, on a daily rate, during the lifetime of the PPI/PPC (or whatever name they chose to call the PPI). Until, the 'General Consumer' clearly understood they had been ripped-off!

Apologies for the rant.

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Just a reminder that the Financial Ombudsman Service has recently come under the jurisdiction of the Freedom of Information Act.

I already have a request in asking for the adjudicator's 'manual' on how they should consider PPI complaints which I'm waiting for.

This gives a brief outline as to what information may be made available:

making a request under the Freedom of Information Act

Interestingly according to an internal BBA document, unlike the FSA and OFT, the FOS ''is not covered by any statutory prohibition on the disclosure of sensitive information about banks'' - something the BBA is clearly concerned about.

[leclerc]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

What a situation!'
What exactly are HMRC implying?

Or is it that the implication is the 'General Consumer' should have been clairvoyant?
But now knowing that they were total (how can I say it) mugs in believing the banks spin on the promised 'Peace of Mind' re: purchasing PPI, PPC or whatever name they chose to call this rip-off insurance?

HMRC, must also be clairvoyant if they believe that the 'General Consumer' could have would have invested this PPI/PPC cover into a saving s account.
Are they suggesting that we all abandon our contents insurance/ travel insurance should it fail.
Ooh, we should have paid the premiums into a savings account, instead of some naive attempt of protecting oneself against protection from the unexpected.
I agree with you AC, that the presupposition that HMRC are taking is that people would have saved the money and not simply have spent it which I think they would have done.

I find it most interesting that many are not receiving full compensation from the banks RE: the interest that was charged, on a daily rate, during the lifetime of the PPI/PPC (or whatever name they chose to call the PPI). Until, the 'General Consumer' clearly understood they had been ripped-off!

Apologies for the rant.

I completely agree with you on this because either you've been ripped off or you haven't and simple interest if you can prove the amount owed should be offered.

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

I agree with you AC, that the presupposition that HMRC are taking is that people would have saved the money and not simply have spent it which I think they would have done.

You and AC are getting confused.

HMRC are not assuming that you would have otherwise saved the money nor are they justifying taxing the interest on that basis. They are clearly using the saving scenario to illustrate that nobody would be worse off if they had or hadn't of done and in no other context:

Emphasis supplied:

“Nobody should be worse off, as had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable.''

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

You and AC are getting confused.

HMRC are not assuming that you would have otherwise saved the money nor are they justifying taxing the interest on that basis. They are clearly using the saving scenario to illustrate that nobody would be worse off if they had or hadn't of done and in no other context:

Emphasis supplied:

“Nobody should be worse off, as had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable.''

EXC, I have already posted that.

Millions of people are facing an unexpected tax bill on their Payment Protection Insurance (PPI) refunds. The banking industry has set aside £6bn to pay for the mis-selling of PPI.

Customers were awarded refunds plus interest of 8% by the Financial Services Authority on the money they originally spent on PPI.

This interest will be subject to tax – earning the government tens of millions of pounds.

A spokesman for HM Revenue & Customs said: “No tax is generally due on the repayment element of refunds paid to those mis-sold PPI. However, the additional interest is taxable – in line with other refund claims.”

They said that “Nobody should be worse off, as had the customer not purchased PPI, but kept that money in an interest-bearing account, the interest received would have been taxable. Customers should check with their PPI provider as to whether tax has been deducted at source.”

Banks have said that they will not be deducting the tax at source; however, one bank said it will.

Loan companies are required to deduct the tax.

I am not surprised that consumers are confused!

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Tax shock for PPI mis-selling victims

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

EXC, I have already posted that.

I know.

It's because you posted it that I quoted it to identify the source of your confusion.

Keep up!