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HMRC internal manual

Savings and Investment Manual

Interest: interest and PPI

Compensation for missold PPI is calculated in a number of ways. It can include an interest element. The links below are to examples based on the most common scenarios. The examples describe how the compensation is calculated and which elements of the compensation are taxable. The examples do not cover every situation. If a customer has received PPI compensation that does not fall into one of these examples it may nevertheless still be possible to identify the 8% interest element in the compensation calculation. If this is not possible then contact the BAI Financial Products Team.

Single Premium Facts Go to
  Loan and PPI still running SAIM2115
  Loan repaid early and PPI cancelled SAIM2120
  Loan and PPI run full term SAIM2125
  Loan still in existence but PPI changed SAIM2130
Monthly Premium Credit card and PPI still running SAIM2135
  Credit card still being used but PPI cancelled SAIM2140
  Credit card closed and PPI cancelled SAIM2145