The certainties of life…

It’s amazing to think one can go to bed one evening and wake up the next morning to discover their tax bill has shot up over £1,000 thanks to PPI compensation. On the other hand, it could have been a lot worse – and I’m glad this incident has come to light when it has.

Back in 2019-2020 I clawed back some payment protection insurance refunds through a specialist company. Now, I thought that the banks paid the interest on the sum that they calculated they owed me, would send me a cheque, and I paid the specialist company their cut. This is what happened (well, the sending of the cheque and paying the specialist PPI company at least). It worked out well (enough to buy a 32Gb, 4Tb SSD Intel Core i9 MacBook Pro outright – the last one before they moved to Apple silicon). After that, I forgot all about it.

Last month I received a notice from the specialist PPI company to say that they partnered with a new firm to claim back tax from those payments. Thought I’d give it a go given how well things had gone before.


I’ve heard back from HMRC directly to say that I now owe them £600 for the tax year 2019-2020, and £430 for 2020-2021. I hadn’t paid enough income tax. But having been digging around emails (as the original paperwork is now long gone – remind me to do a better job of keeping important financial documents by scanning everything in for future reference), I think I know where things have gone wrong (it’s 5am as I type this – brain working overtime).

There was a statutory 8% interest paid on the PPI reclaim – e.g. interest owed on what I paid into the PPI scheme over the years. It’s that interest that was taxed – not the final sum that I got back from the banks. Hence, it’s highly likely that I should have declared those figures to the HMRC at the time. If that’s the case, I wasn’t well informed by the specialist PPI company!

I’m still trying to get some information out of the company dealing with the PPI tax compensation (as I’m sure I’ll enjoy trying to speak to the HMRC) – but I’ve a feeling this is going to be something I’ve just got to take a hit on – apparently it has to do with the tax rate at which I pay – I don’t think either the original PPI compensation company or this tax company took that into consideration. PAYE really spoils you in that you don’t have to think about tax as often as, say, somebody who is self-employed has to. Or if you’re American – how I’d hate those tax returns 😉

As the old saying goes – there are only two things certain in this life: death and taxes.

In other news – I’m rejoining Virgin Media broadband (Gig1 tier) which should supply their new Hub 5 which uses a newer, better (lower latency) chipset than the Hub 4 and is hopefully less liable to die during a power outage. Which reminds me I really must buy a cheap UPS with surge protection. While I’ve been enjoying the o2 mobile broadband with the Nighthawk M6 mobile router – but the latency is a killer – especially if I want to use GeForce Now to play a game of Fortnite or Death Stranding PC.