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Tax back on Volkswagen Financial Services car finance compensation

Lender guide · Car brand Volkswagen Financial Services · part of Volkswagen Group
Quick answer

If Volkswagen Financial Services 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 groupVolkswagen Group
Car brandsVolkswagen, Audi, SEAT, Škoda and more
Motor finance provisionNot published
Agreements in FCA scheme6 Apr 2007 – 1 Nov 2024

About Volkswagen Financial Services

Based in Milton Keynes, Volkswagen Financial Services (UK) Limited is the Volkswagen Group’s UK finance company and one of the country’s largest motor finance providers. It offers purchase finance and leasing under names linked to Volkswagen, Audi, SEAT, Škoda, Porsche, Bentley and Lamborghini. Because the finance is usually arranged by a franchised dealer, your paperwork may show the car brand rather than the company’s own name.

Volkswagen Financial Services has challenged the FCA’s compensation scheme at the Upper Tribunal, and parts of the scheme have been suspended until a hearing expected in December 2026 or February 2027.

What Volkswagen FS 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. Volkswagen Financial Services 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.

Volkswagen FS questions

Will claiming affect my Volkswagen Financial Services compensation?

No. The rebate is a separate claim to HMRC. Volkswagen Financial Services isn’t involved and your compensation doesn’t change.

I had more than one Volkswagen FS agreement

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

Volkswagen FS 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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