Success, but the bank has retained £300+ for Tax

[Tungata]

After them trying every possible trick to wriggle out of their obligation to do so

and then unnecessarily wasting both my time and the time and efforts of FOS,

after a fully 2 years, Halifax Bank have finally conceded (after being instructed by FOS to do so)

and made me a settlement offer for miss-selling me PPI more than 15 years ago.

If nothing else, this paragraph, should simply say, be patient and stick at it

 

On reading the settlement offer letter, I was surprised to that the bank have

unilaterally decided to make a deduction from the amount due to me for “taxation due, at the standard rate”

 

Whilst the total compensation amount offered is within a few pounds of what I have calculated,

I had not considered that the bank would deduct 25% of the interest element.

Whilst I knew that I would possibly have a tax liability on the interest element of this compensation,

my immediate reaction to this was that my Tax affairs are between me and HMRC

and any liability due (to HMRC) is mine to sort out direct, at the end of the Tax Year.

 

I called Halifax to question why they had made this decision.

The response given was that this kind of deduction is

“standard practice and in accordance with FSA guidelines”

 

Can anyone advise on this please?

I completely disagree with the stance taken,

this bank has no knowledge of my tax code,

my Tax number,

my payment relationship with HMRC,

or liabilities I have (if any),

so any errors in calculation and or payment will be practically impossible for me to recover downstream.

 

Whilst the bank said they would write to me confirm the deduction made,

providing a copy of their notification to HMRC,

I do not trust them to either do so, or get it right in a timescale that is consistent with any liabilities I have to HMRC.

I also do not trust them to immediately pay the ”amount due”,

giving them the opportunity to take the benefit from any interest due, rather than me.

 

This is a bank that has

1. already miss-sold me PPI,
   
2. denied any wrong doing when I complained,
   
3. lied to me by ignoring their own industry code of conduct in rejecting my complaint and then,
   
4. further tried to deceive FOS when they got involved
   

so why should I trust Halifax to correctly pay the Government on time, on my behalf.

If (when?) they get it wrong, who will be left holding the baby?

 

 

How can I stop these crooks doing this? I’d phone FOS,

but suspect that will not want to get involved as it's not in their remit,

so is there a standard letter template demanding them to pay me the amount due in full?

 

TIA

[citizenB]

This does indeed seem to be standard practice, but should only be for 20% ? If you dont pay tax, then I think you can reclaim it from HMRC.

 

Someone else asked this question a couple of days ago.. I will go and find a link.

[citizenB]

Here you go....

 

The rules about deducting basic rate tax were as a reult of the Finance Act 2013 and they came into force in September/October 2013.

 

Tax will be deducted at source on the 8% element and such income will need to be declared to HMRC and a refund claimed for a non taxpayer.

 

More information here...

 

http://www.hmrc.gov.uk/manuals/saimmanual/SAIM9115.htm

[Tungata]

Thanks for the super-quick response

 

Understand the HMRC directive, but not at all happy that Hx get to decide when they pay HMRC and then gain the benefit in the meantime. Meanwhile, I'm left pondering if I'm due a fight with HMRC....

[citizenB]

I wonder if it would be worth a call/letter to HMRC and ask if the Halifax has made the payment to them

[hillards]

I just went over a similar thing here: http://www.consumeractiongroup.co.uk/forum/showthread.php?428754-taxed-on-redress&p=4575705&viewfull=1#post4575705

[Echinus]

When reclaiming PPI on a loan taken jointly is the interest recovered deemed to be split equally between both parties? and how does this work for tax purposes?

[citizenB]

If a joint loan then the PPI is generally only applied to the first named - so the company will probably apply the tax to the first named. You might need to check and if you require it to be done in a different way, then you will have to let htem know.