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Tax back on Santander Consumer Finance car finance compensation

Lender guide · Bank Santander Consumer Finance · part of Santander
Quick answer

If Santander Consumer Finance paid you compensation with interest, it will normally have taken 20% income tax off the interest. Basic-rate and non-taxpayers can usually get that tax back from HMRC, and we handle the claim for you.

By , Finance Editor Last checked 3 October 2026 · Sources listed below

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Parent groupSantander
Lender typeBank
Motor finance provision£640m
Agreements in FCA scheme6 Apr 2007 – 1 Nov 2024

About Santander Consumer Finance

Santander Consumer Finance is the trading name of Santander Consumer (UK) plc, a Redhill-based car finance lender within the Santander banking group. It has also lent under brand names such as Volvo Car Credit, Kia Financial Services and Mazda Financial Services, so your paperwork may not say Santander at all. Most of these agreements, usually PCP or hire purchase, were arranged by the dealer.

Santander UK has built up a £640m provision for motor finance compensation, after adding £179m in the first quarter of 2026.

What Santander took off your payout

Compensation is usually made up of three parts. Only one of them is what we reclaim.

1 · RedressThe commission or interest you overpaid. This part isn’t taxed.
2 · InterestAdded for the time you were without the money. This is taxed.
3 · Tax deductedUsually 20% of the interest. This is what we get back for you.

Can I claim?

  1. Santander Consumer Finance paid you compensation, under the FCA scheme, after a complaint or through the Financial Ombudsman.
  2. The compensation included interest, with tax deducted.
  3. You were a basic-rate or non-taxpayer in the tax year you were paid.

Santander questions

Will claiming affect my Santander Consumer Finance compensation?

No. The rebate is a separate claim to HMRC. Santander Consumer Finance isn’t involved and your compensation doesn’t change.

I had more than one Santander agreement

Every payout you received in the same tax year goes into one claim, including payouts from other lenders.

Santander hasn’t paid me yet

Reserve your rebate now. We’ll tell you when payments start and file for the right tax year once you’re paid.

My letter doesn’t show any tax deducted

If no tax was deducted, there’s nothing to reclaim. If you’re not sure, our case team can check it for you at no cost.

What do you do for me?

We check what you’re owed, work out the right tax year, prepare and submit the claim to HMRC as your agent, deal with any questions and send you the balance after our fees.

Sources

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