Halifax Rewards - gross or net?

YorkshireBoy

MegaMiniMouse wrote: »

What is the rationale behind taxing the monthly reward, but not taxing the one-off switching incentive?

Haven't time to go find it again, but I've previously read on the HMRC website that it's to do with the ongoing nature of the Reward, ie it's a regular income and not contingent with spending a certain amount, for example on a cashback credit card...in which case it would be called a rebate and not taxable.

In summary, the incentive is a one-off payment (unless, like myself and others, you've managed to get it more than once ), so not ongoing and therefore not taxed.

MegaMiniMouse

YorkshireBoy wrote: »

Haven't time to go find it again, but I've previously read on the HMRC website that it's to do with the ongoing nature of the Reward, ie it's a regular income and not contingent with spending a certain amount, for example on a cashback credit card...in which case it would be called a rebate and not taxable.

In summary, the incentive is a one-off payment (unless, like myself and others, you've managed to get it more than once ), so not ongoing and therefore not taxed.

I guess it makes some kind of sense, but it is interesting that the banks obviously employ considerable numbers of people in one department whose job is to make sure that the banks' retail operations are always in total compliance with the letter of the law whilst, in another department, they pay large bonuses to the individuals who can find the most advantageous ways to skirt around the spirit of the law.

Ed-1

YorkshireBoy wrote: »

Haven't time to go find it again, but I've previously read on the HMRC website that it's to do with the ongoing nature of the Reward, ie it's a regular income and not contingent with spending a certain amount, for example on a cashback credit card...in which case it would be called a rebate and not taxable.

In summary, the incentive is a one-off payment (unless, like myself and others, you've managed to get it more than once ), so not ongoing and therefore not taxed.

Have you had it more than once since Jan 12?

YorkshireBoy

Ed-1 wrote: »

Have you had it more than once since Jan 12?

No, just the once since then...but twice (I think) before then.

Muddled_Pensioner

With the new tax year 2016/17 now in place, I expected my Halifax Reward to be paid GROSS, but alas May's payment has been taxed. I've just checked the booklet they sent out July 2015 which came into effect on November 2015...

"£5 Reward payment is 'net' of income tax, which means we pay it after taking
off income tax at the rate set by law (currently 20%).
The gross amount is £6.25 This is the amount before income tax is taken off."

So if it was possible for certain people to re-claim the tax paid using the R40 form, (according to this site) why is it not paid GROSS now to all?

[Deleted User]

Muddled_Pensioner wrote: »

With the new tax year 2016/17 now in place, I expected my Halifax Reward to be paid GROSS, but alas May's payment has been taxed. I've just checked the booklet they sent out July 2015 which came into effect on November 2015...

"£5 Reward payment is 'net' of income tax, which means we pay it after taking
off income tax at the rate set by law (currently 20%).
The gross amount is £6.25 This is the amount before income tax is taken off."

So if it was possible for certain people to re-claim the tax paid using the R40 form, (according to this site) why is it not paid GROSS now to all?

It's a reward payment, not an interest payment, so it doesnt come within the new personal savings allowance. It is a taxable payment, taxable under "any other income".

polymaff

Deleted_User wrote: »

It's a reward payment, not an interest payment. [STRIKE]so it doesnt come within the new personal savings allowance[/STRIKE] It is a taxable payment, taxable under "any other income".

... and when you declare it, don't forget to also declare the tax the Halifax have deducted.

The topic they just couldn't kill

bjbyorkshire

I get £5 reward on a current account, so does Hubby, and we both get £5 reward on 2 separate credit cards each month if we use them for more than £300 spend. Can all these £5 be claimed back?

Also....

I pay an accountant to do our s/a as its all been a bit complicated with a second job and a rental income. The accountant will lump all my income together, savings interest etc and the tax refund would be sorted out here? Or would it? If this reward is not to be included in the nil band rates then will I still need to claim the interest on the rewards via an r40 form?

Hope this makes sense to someone.

Thanks

Nick_C

bjbyorkshire wrote: »

I get £5 reward on a current account, so does Hubby, and we both get £5 reward on 2 separate credit cards each month if we use them for more than £300 spend. Can all these £5 be claimed back?

My understanding is;

The reward on your current account is income. It is unrelated to the any spending you do on the account. It is not cashback, so it is taxable.

The reward on the credit card is cashback. You only get it you spend £300 or more. So it is a discount, not income, and so not taxable; like any other cashback scheme.

gt94sss2

bjbyorkshire wrote: »

I pay an accountant to do our s/a as its all been a bit complicated with a second job and a rental income. The accountant will lump all my income together, savings interest etc and the tax refund would be sorted out here? Or would it? If this reward is not to be included in the nil band rates then will I still need to claim the interest on the rewards via an r40 form?

The Halifax Reward £5 payments (and the tax paid) on the current account have to go on your self assessment return under 'other income' not in the section for savings interest.

Don't fill in an R40 as otherwise you would be completing 2 tax returns..