Tax return and Halifax Reward

MoneySavingUser

My mother used to have a current account that gave interest and then part way through the 09/10 tax year I had it changed to a reward account

so until October 09 she has interest and after rewards (though I think I have forgotten to put in the £1000 a few times so not every month)

Now in order to fill her tax return I asked Halifax to give me a certificate of interest - the lady said it would not show the reward as it is not interest and nothing is deducted at source so:

1. Do I show the reward on the tax return?
2. I think I read something about the gross amount of the 'reward' being £6.25 - doesn't this mean tax has been taken off if you only get £5?

opinions4u

MoneySavingUser wrote: »

1. Do I show the reward on the tax return?

Yes. I believe "other income" is where it should be declared.

2. I think I read something about the gross amount of the 'reward' being £6.25 - doesn't this mean tax has been taken off if you only get £5?

The gross amount is £6.25. The net amount is £5. Higher rate taxpayers have an additional liability. Non-taxpayers can claim back the £1.25 from HMRC.

callum9999

opinions4u wrote: »

Yes. I believe "other income" is where it should be declared.

The gross amount is £6.25. The net amount is £5. Higher rate taxpayers have an additional liability. Non-taxpayers can claim back the £1.25 from HMRC.

Is there any way to get Halifax to just pay you £6.25 as opposed to claiming it back later?

jambosans

callum9999 wrote: »

Is there any way to get Halifax to just pay you £6.25 as opposed to claiming it back later?

No. Halifax will refer you to HMRC (see "An important note" on this page):-

Halifax wrote:

You may reclaim tax from HM Revenue & Customs if the amount of tax we have taken off is more than you have to pay.

Mikeyorks

MoneySavingUser wrote: »

1. Do I show the reward on the tax return?

Yes. You show the aggregate of each payment. You count each payment as £6.25 in the gross interest column and £1.25 as tax deducted. Just lump it together with the rest of the gross interest / tax deducted.

Notwithstanding the rubbish Halifax is getting away with and creating work by declining R85s on these accounts ..... it is 'interest'. The 20% deduction is prescribed by the TDSI (Tax Deduction Scheme for Interest) ........ it's only recently that also coincides with the basic tax rate.

MoneySavingUser

They have sent my mother a statement now - the lady in branch claimed a) it didn't show Rewards but it does b) sent it for the wrong dates! - so have to go ask again now

daniel598

Get your mother to phone telephone banking. They will gove her the figures over the phone and also order the correct statement as a backup