PPI payouts and tax credits

tkachev

OH recently had a PPI payout made up of a payment compensation plus interest at 8%.
Does anyone know if the interest part of the payout has to be declared to tax credits as 'other income'? I know there is a limit of £300 so I've never had to declare anything before but this year have shares, ISA and the above PPI generating interest.

Has anyone else had a PPI payout with the interest element and had to declare it?

Elizabeth

frogmorton

Not had this experience Elizabeth, but

Will this link help at all??

http://www.hmrc.gov.uk/news/news100512.htm

In your shoes I probably would tell them and let them decide to eb on the safe side?????

love

Toni xxx

tkachev

Thank you Toni. It seems that I do have to declare the interest payment he received. I hope it doesn't lower our tax credits too much as it will come out of my housekeeping.

I wonder how many people realise it needs declaring for tax and tax credit purposes?

Elizabeth

frogmorton

Probably not many you know, but it's risky for them - the tax man isn't someone you want to make a mistake with :?

My brother has a bonus at work (some years), and if he gets a good one one year my sis in law is broke the year after :roll:

Fingers crossed the interest is not too high for you

Love

Toni xxx

tkachev

It seems that the tax man is told about PPI payments so will know if not declared. I'm not sure how true that is ?

Some companies deduct at source and others don't although that should be made clear on the paperwork.

It certainly didn't occur to me to declare it to anyone when he first received the payout.

Elizabeth

frogmorton

Well it's a good job you even thought about it because I reckon the tax-man will be catching a few unsuspecting people out this year