Interested in moving to 123

innovate

I would keep my Flexaccount in "main" shape - i.e. deposit £750 a month into it, so not only the Travel Insurance but also any "Flexclusives" will remain accessible for me. Easy to manage with SO or FP.

Gromitt

ManAtHome wrote: »

I just keep mine for internetting (switch off the overdraft and use it like a prepaid card).

You can still go overdrawn though, don't forget, but without an overdraft in place, it costs a lot more.

ManAtHome

Gromitt wrote: »

You can still go overdrawn though, don't forget, but without an overdraft in place, it costs a lot more.

Dunno about that - I've had a payment bounced because there wasn't enough in the account (only house insurance whilst I was out of the UK..!!).

Gromitt

Once I didn't have sufficient cash in the account and the payment still went through, and then they charged me a "Paid item fee" of £25 !

Then I used an ATM and incurred another £25.

A quick message to them got them both refunded however. Never done it again since.

innovate

If you are sailing so close to the wind that £25 could tip you into an unauthorised overdraft, it might be worth applying for an overdraft. That won't exactly be free of charge either, and I am not advocating overdrafts, but it might be cheaper and the lesser evil.

snowgo

Just wondering how they treat cashback in the 123 account regarding tax?
Obviously interest on credit balances will be taxed. But is the cashback also taxed? Or is it tax-free if it is considered a rebate on money you've spent? A bit like the 'reward' in the halifax reward account perhaps?

Anyone with a 123 account able to confirm if you're taxed on cashback.

ses6jwg

snowgo wrote: »

Just wondering how they treat cashback in the 123 account regarding tax?
Obviously interest on credit balances will be taxed. But is the cashback also taxed? Or is it tax-free if it is considered a rebate on money you've spent? A bit like the 'reward' in the halifax reward account perhaps?

Anyone with a 123 account able to confirm if you're taxed on cashback.

cashback is not taxed on the bank account or credit card

innovate

All cashback (from Santander, on credit cards, from Quidco etc) is tax free. You paid for goods or service from money that has already been taxed, and you have just been savvy and negotiated a bit of a discount on your purchase.

The Halifax Reward is actually not a cashback. Halifax pay you £6,25 minus 20% basic rate tax = £5.

The £5 Reward payment is paid 'net' of income tax. This means we pay it after taking off income tax at the rate set by law (currently 20%). If you're a higher-rate taxpayer, you may have to pay extra income tax on the reward payment. The amount before we take off income tax is £6.25. You may reclaim tax from HM Revenue & Customs if the amount of tax we have taken off is more than you have to pay.

Source: http://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account/