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Posted Mon, 20 Nov 2023 01:02:40 GMT by User089159
I had a transaction with my bank. I was overcharged some amount by the bank or/and related party. Then, after some time, they identified that there was the overcharge, and they returned that money with some 'interest to say sorry'. From my conversation with the bank, my understanding is that it is a "compensation payment" and not a "payment that's been earned". Could you advise me, please, in this case, should I put it somewhere in my Self Assessment (e.g., as bank interest or as miscellaneous income), or I should not put it anywhere in Self Assessment?
Posted Tue, 21 Nov 2023 17:23:51 GMT by HMRC Admin 10
Hi
The 'sorry' payment is not taxable but the interest that they applied forms part of your personal savings allowance and is taxable income.
Posted Wed, 29 Nov 2023 01:00:22 GMT by User089159
Thank you very much. There was no any additional interest, only the 'sorry' payment with the text 'interest to say sorry'. I presume that is a 'sorry' payment that was called 'interest to say sorry'. As I wrote earlier, from my conversation with the bank, my understanding is that it is a "compensation payment" and not a "payment that's been earned". Could you advise me, please, in this case, should I put it somewhere in my Self Assessment (e.g., as bank interest or as miscellaneous income), or should I not put it anywhere in Self Assessment?
Posted Thu, 30 Nov 2023 15:06:43 GMT by HMRC Admin 25
Hi User089159,
If it is a compensation payment you do not need to declare it.
Thank you. 

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