Taxable compensation component of overpayment refund

26/04/2019 14:37:38
My bank has compensated me, for overcharging me on my buildings insurance for many years by adding it to the mortgage instead of billing me immediately as I had instructed. The refund contained two components - a refund of the overpayment (non-taxable) and a compensation which is effectively interest on the overpayment and therefore taxable (and was paid net of basic rate tax).

Can I include the taxable component in the "Taxed UK Interest" section of my tax return, or should it come under another section please?

Many thanks,

Tony Heath.

Re:Taxable compensation component of overpayment refund

26/04/2019 16:43:40
Hi Tony,

Yes, the 'net' amount of the interest payment will go into the taxed interest section of the return.

Thanks for your question.

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Taxable compensation component of overpayment refund

29/04/2019 06:40:35
Thanks again for another very clear answer :o)

I still haven't found anything to justify speaking to your research team about "improving the forum" because everything I have asked has been promptly, clearly, and courteously answered, saving me the bother and cost of phoning HMRC with my queries. I can't find anything that needs improving! I hope you continue to provide this service because it's superb.

Kind regards,

Tony Heath.