Tax on Halifax Reward

jonesMUFCforever

Technically is it not income???.............and should it be taxed????

pinkdalek

rb10 wrote: »

You do not in fact even need the tax certificate that the bank will send you ... just fill in the R40 form from the HMRC website, send it to them, and they'll put the tax straight into your account.

I think you may find that should the HMRC wish to see confirmation or decide to investigate your claim further then they would require proof, hence why you should request a tax certificate from your bank. End of the day it is free and you have the information there should you require it at a later stage.

HMRC might also be intrigued as to how someone can fund a current account with £1000 every month and yet be a non taxpayer......

jennifernil

Why should a non-taxpayer not have a spare £1000 to circulate round Reward accounts?

I do not pay any tax, my pension is only £2650, and adding the interest on my savings still leaves me under the tax threshold, but I have over £50k in savings, so no problem finding a spare £1000!

My £1000 goes through 6 various Reward accounts, and 2 Lloyds Vantage accounts ( was 8 at one time) held by family members. The £1000 does not need to be "income" remember.

I reclaim "tax" on £210 of Rewards each year, HMRC have never requested tax certificates, and my refund was paid within 2 weeks last year.

Old_Wrinkly

Mikeyorks wrote: »

The issue - that Halifax treat this not as a deduction under the Tax Deduction Scheme for Interest (TDSI) - seems to stem from the Halifax side. I know not why (other than their paranoia of selling everything under the Reward banner) ...

Which raises the question of whether the extra 0.2% 'Reward' applied to other accounts is really 'interest' or not ... clearly this 'Reward' is being treated as 'interest' at the moment.

rb10

Old_Wrinkly wrote: »

Which raises the question of whether the extra 0.2% 'Reward' applied to other accounts is really 'interest' or not ... clearly this 'Reward' is being treated as 'interest' at the moment.

I would imagine that that 'Reward' is interest, as it is a percentage value of your account balance.

It therefore fits in with the dictionary definition of interest, which the £5/month Reward does not.

masonic

Here is an interesting question I've pondered in the past: First Direct and Santander give people £100 for switching their current accounts and then meeting minimum funding requirements. Is this paid net of tax and can tax be reclaimed on it? If not, why should tax be deducted/reclaimed on the Halifax rewards?

glider3560

masonic wrote: »

Here is an interesting question I've pondered in the past: First Direct and Santander give people £100 for switching their current accounts and then meeting minimum funding requirements. Is this paid net of tax and can tax be reclaimed on it? If not, why should tax be deducted/reclaimed on the Halifax rewards?

I was just about to post a new thread asking the same question. I'd be interested in knowing as my mum isn't a taxpayer but recently received the £100 FD payment on a joint account.

opinions4u

masonic wrote: »

Here is an interesting question I've pondered in the past: First Direct and Santander give people £100 for switching their current accounts and then meeting minimum funding requirements. Is this paid net of tax and can tax be reclaimed on it? If not, why should tax be deducted/reclaimed on the Halifax rewards?

While I'm not claiming an HMRC level of expertise, my undersatanding is that if something is deemed as coming from the provider's marketing budget the recipient does not pay tax on it.

Therefore there would be nothing for an individual to reclaim and no tax liability for them to pay.

Old_Wrinkly

And Halifax's 'Reward' scheme isn't a marketing tool?

ETA: I suppose you'll say that although the scheme is a marketing tool, the money to fund the Reward payments does not come from a marketing budget.

opinions4u

Old_Wrinkly wrote: »

And Halifax's 'Reward' scheme isn't a marketing tool?

You could split hairs here, and I'm going off previous HMRC decisions on cashback mortgages (where in the past they did try to establish reason to tax the cashback) rather than anything related to current accounts.

ETA: I suppose you'll say that although the scheme is a marketing tool, the money to fund the Reward payments does not come from a marketing budget.

It's not what I say that matters is it? I assume the marketing to attract customers is classed differently to the payments made as part of the day to day operation of the account.

I was always intrigued that their Moneyback current account didn't attract a tax laibility, the Reward on the Clarity Reward credit card doesn't, but this sort of scheme does.

What I do know is that when it comes to the Reward payments Halifax took advice from HMRC and implemented the system that currently exists.

I doubt they did it through choice.