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Threat to tax Ulster Bank's compensation payout

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CUSTOMERS hit by Ulster Bank's IT meltdown this summer have been told they may be taxed on compensation payments.

Long suffering customers of the bank were told yesterday that they may be liable for capital gains tax of 30pc on the payments meant to compensate them for being left out of pocket and inconvenienced by failures at the bank's computer system in June and July.

Under the Ulster compensation package customers forced to visit their branch more frequently that usual during the IT crisis will get a €25 payout.

People who ran up extra costs because of the bank's failures will get that money back, plus a 20pc top up in compensation up to a maximum of €120.

It has now emerged that some better-off customers will end up handing almost a third of their payment straight to the tax man.

On a €25 payment, the tax means the Revenue will end up with €7.50 of the "compo", leaving some victims of the mess with just €18.50 for their pains.

A maximum €120 "top-up" will shrink to €84.

Ulster Bank customers were told of the potential tax liability yesterday when letters detailing the scheme were sent out by the bank.

Irish Independent