Have you been sent a Visa card loaded with money from QuickQuid, or its sister brand Pounds Till Payday?
It’s a nice surprise, but what is it for and how much tax was deducted? You need to know the amount of tax deducted because you may be able to claim this back from the tax man!
The refund letters
These cards have been sent out in August to some customers who previously had a refund from QuickQuid after making an affordability complaint to QuickQuid.
The letter says:
Following a further review of your complaint, we have determined that you are due an additional amount of redress/monies in addition to the goodwill offer you received.
Please find enclosed a pre-loaded Visa debit card for £xxx to reflect this additional amount.
Please note that this redress includes 8% per year “simple” interest, sometimes referred to as “delay interest”. This additional interest is subject to a 20% wihholding tax. As required by law, the withholding tax has been deducted from your payment and will be remitted on your behalf to HMRC. Please retain this letter as evidence of amounts withheld should HMRC request such evidence.
The Financial Ombudsman has always said that these refunds should have 8% simple interest added. But QuickQuid has often not added the 8% extra element when it has given a refund directly to a customer, not through the Ombudsman.
So it is good that QuickQuid is now recognising that it should have been paying this.
Here are some examples readers have reported receiving
- Natalya had a refund of £1000 from QuickQuid last year and has been sent a card with £20 on it.
- Paul had a refund of £2500 last summer and has now been sent £800.
- Shem had a refund in September of £3905 for loans dating back to 2012. His extra refund is £1260.
The amount of 8% interest added matters
The letter unhelpfully doesn’t say if all the money being given is 8% simple interest. If it is, then the small amount Natalya has been sent looks as though it may be too low!
And it doesn’t specify the amount of tax deducted, which is a figure that people need to know if they complete a self-assessment tax form.
Most people will also be able to reclaim some or all of the tax deducted from HMRC:
- non-taxpayers should be able to reclaim it all,
- basic rate taxpayers can reclaim up to £200 across all refunds in a tax year; and
- higher rate taxpayers may be able to reclaim up to £200, but may in some situations have a tax liability.
See How to reclaim tax deducted from PPI and payday loan refunds for details of how to do this.
So if you have had one of these letters, you need to ask QQ to confirm exactly how much of the amount you have been sent is 8% simple interest and how much tax has been deducted.
Using the money on the card
One reader points out:
be careful if you withdraw cash it charges you regardless as to what machine you use and it’s not cheap. So way better to use it in shops with the pin number you get.
There is also a really tight deadline for activating the card. That would normally be a good security measure, but these cards are being sent out in peak holiday season. So if you find your deadline has already gone when you open the letter, you will need to phone QuickQuid and ask them to send a new one.
If you have moved…
Then you probably won’t get the card as QQ won’t know your new address. I suggest you phone them up and tell them you have moved if you have had a refund from QQ or PTP, from them directly and it didn’t include 8% interest.