AA 5.15% 5 year bond withdrawal: some calculations

Rev_Rhubar

I've just spoken to BM on the phone and they will accept additional deposits until the 23rd. You can send them the money from the bank with your current account using BACS . Details on the BM website: Savings > Common Enquiries >

Rollinghome

The address on the BM envelope I got is slightly different:

Savings and Investment Team - D470/5840
Birmingham Midshires
PO Box 183
Pendeford Business Park... etc.
WV9 5BR

and

Saga Savings Team - D470/5898
PO Box 2264
Pendeford Business Park etc...
WV9 5ZP

Probably all ends up in the same pile when it gets there.

dougz_2

Porcupine wrote: »

It's a rather difficult question to phrase, but I did ask AA. The lady on the phone referred to it as '90 days loss of interest' and that it would be at whatever rate you receive on the account. So if you're registered net you lose interest at the net rate. So as far as I understand it you effectively receive back the tax you paid on the lost interest.

So AA will charge a reduced penalty of 1.24%*80%=1% if you are not entitled to gross interest? That sounds a bit unfair to anyone who is not in the standard income band, as the non-taxpayers will be paying a 25% higher penalty charge right away, and 40% band people will presumably still get taxed for an additional 20% on all their interest at the end of the year regardless?

kar999

Rollinghome wrote: »

The address on the BM envelope I got is slightly different:

Savings and Investment Team - D470/5840
Birmingham Midshires
PO Box 183
Pendeford Business Park... etc.
WV9 5BR

and

Saga Savings Team - D470/5898
PO Box 2264
Pendeford Business Park etc...
WV9 5ZP

Probably all ends up in the same pile when it gets there.

It's all in the same building which is BM's Corporate HQ.

I'm delivering mine by hand to their reception tomorrow as I live nearby.

dougz_2

Porcupine, I telephoned the AA today and they contradicted what they told you:

The person I spoke to was quite definite that the penalty deducted would be equal to 90 days gross interest regardless of tax status, that the full interest will still appear on the statements, and that the end of year tax certificate will not show a reduced total for interest when a penalty has been charged.

He sounded like he knew what he was talking about, and agreed with me that this meant that, for a tax payer, the penalty would equate to more than 90 days net interest.

He said that any question of getting a tax refund for the 90 days penalty would have to be taken up with the inland revenue rather than them. As I explained in my previous post, I don't think that would be fair on non-taxpayers anyway, but if someone wants to call the tax people I would be interested to hear what they say.