Budget closes PPI tax loophole

In yesterdays budget by George Osborne, he made a change that will have probably gone unnoticed in many of this mornings headlines, but it affects the banks and lenders that have been caught up in the huge PPI scandal.

Corporation tax on profits

Corporation tax for those who aren’t quite sure, is the tax paid by businesses based on their profits. An example of this would be that if a business generated £1m, but had £250k worth of costs to pay for things such as wages, marketing and other recognised outgoings, it would pay tax on the remaining £750k which is classed as profit.

Banks and lenders, until Mr Osborne’s announcement of forthcoming changes, were able to declare compensation payments within their costs which actually benefited them by reducing their profits, in turn reducing the amount of corporation tax they had to pay.

The change

Moving forward, banks and lenders cannot include compensation payments for their wrongdoing in their costs, which means they will also have to pay tax for their past behaviour too.

Whilst this is probably long overdue we do welcome the Chancellor’s decision to stop banks from reaping the benefit of including such payments within their costs.

PPI’s impact in the economic recovery

With almost £28 billion already set aside for the mis-selling of PPI it cannot be underestimated just how much of an impact these compensation payments have had on the recovery of the economy.

Figures show that the average customer receives approximately £3,332** compensation and this money has been used towards the purchase of holidays, cars, new wardrobes and other luxury items, hence creating jobs and confidence.

The Packaged Bank Account scandal

Whilst the PPI scandal still has years to run with our estimation that 7 million have yet to make a claim, the next scandal is upon us.

Mis-sold Packaged Bank Accounts (PBA’s), could well be the next boost to the economy, with 10 million of these accounts in existence and potentially millions more that have been closed but can still be claimed against.

Making a PPI or PBA Claim

Not sure whether you’ve been sold PPI or a PBA? Our fast and comprehensive checking systems that have been set up with almost all banks allows you to find out whether you’ve been one of the tens of millions who have been affected.

Not sure whether you qualify for mis-sold PPI? Check here to see whether you may.

Want to know how much you may be owed? Why not try our PPI calculator.

If you have had a loan, mortgage or credit card within the last 25 years there’s every chance you’ll have been paying for PPI.

Not sure whether you qualify for a mis-sold PBA? Check here to see whether you may.

We’ve made claiming easy, taking the stress out of you having to deal with the paperwork, the stress, and the tactics employed by the bank to try and wriggle out of paying.

So….how do you start your claim?

#1: The first option for you is to fill in the ‘Start Your Claim’ form which can be seen on every page. By doing so, we will send you out a form in the post for you to complete. Once we’ve received the form back in the freepost envelope we send you with your form, we can make a start on your claim.

#2: The second option for you is to download our form, which again can be found on every page by clicking the ‘Download Claim Pack’ button. Simply print it out, complete it and send it back to us, our address can be found here. Once we receive is back we’ll let you know and make a start.

Our team of experts are on hand to answer any questions you have via telephone, email or our live chat facility.

So….why wait, let’s get started!

PPI tax loophole closed