Following a review of the way some banks sold Interest Rate Hedging Products (IRHP), some businesses are entitled to redress payments. These redress payments are now starting to be made to those businesses which were affected.
Mis-sold interest hedging products (IRHP)
The Financial Conduct Authority (FCA) has identified failings in the way some banks sold IRHP to businesses taking out business loans, which were intended to offer protection against rising interest rates.
The banks calculate the amount due which can be made up of three elements:
- basic redress - represents the difference between the actual payments made and the payments that would have been made without the product
- compensatory interest - at 8% per year
- consequential losses - losses suffered due to not having the use of the money.
If you do receive a redress payment please let us have the paperwork so we can review the position. There are certain circumstances where the tax treatment of the payment will be different so please do contact us so we can investigate the position and ensure the correct accounting and tax treatment.
Internet link: HMRC news