What is the Highest Interest Rate / Cashback / Rewards You Can Get?

zolablue25

Special_Saver2 wrote: »

Hi Folks,

Do you think that these cashback payments are taxable?

The Halifax "Reward" is taxable - Halifax sends me a certificate each year for the interest to declare on my tax return. I think that one-off cashback (e.g. current account switching bonus) is non-taxable but that recurring cashback payments are taxable like interest.

SS2

I know its comparing apples to oranges but the cashback I get on my Amex credit card is not taxable as far as I can make out anyway.

This probably hasn't helped at all!

colsten

I think there must be a misunderstanding - there is no minimum spend on the Natwest Reward scheme.

colsten

Special_Saver2 wrote: »

Do you think that these cashback payments are taxable?

Cashback is never taxable as it is a discount on a product or service that you are buying.

Reward payments are always taxable as they are not associated with purchasing anything.

TheTracker

Maybe Sam_J12 needs to start a "What is the highest Cashback and Rewards amount you can get?" thread. It would actually be useful, so often we read "Try the search function newbie, we discussed that reward 18 days ago. Duh.". Be careful, though, of posters talking about high interest rates.

badger09

ciscosurplus wrote: »

Indeed!

Most seem to be a one hit only, so probably worth going through the pain once.

does the switch bonus count towards tax? I'm a higher rate payer, my DW doesn't earn enough to pay any UK tax.

Priority one is closing the Lloyds

Why on earth would you close it, when you could use it for a switching bonus, and save yourself the trouble of creating a 'dummy account' per your earlier post:cool:

ciscosurplus

badger09 wrote: »

Why on earth would you close it, when you could use it for a switching bonus, and save yourself the trouble of creating a 'dummy account' per your earlier post:cool:

Sorry I meant to use it exactly for that purpose! It was just working out which account to use as the "first" or primary.

Special_Saver2

colsten wrote: »

I think there must be a misunderstanding - there is no minimum spend on the Natwest Reward scheme.

I have added more details to that entry in post 1 to make my point here clearer:

Free cashback if you pay more than £1,200 per year on household bills by direct debit... NatWest Reward Current Account paying 3% cashback for a £3 per month fee (you need to pay more than £1,200 per year on household bills before you make back the £36 annual fee, assuming you are not paying any tax on NatWest's reward payment; you will have to spend more if it is taxed)

colsten wrote: »

Cashback is never taxable as it is a discount on a product or service that you are buying.

Reward payments are always taxable as they are not associated with purchasing anything.

How would you classify The Co-op's Everyday Rewards? The £4 per month seems taxable as you do not have to do anything to get it other than operate the account, whereas the 5p per debit card transaction sounds more like cashback.

TheTracker wrote: »

Maybe Sam_J12 needs to start a "What is the highest Cashback and Rewards amount you can get?" thread. It would actually be useful, so often we read "Try the search function newbie, we discussed that reward 18 days ago. Duh.". Be careful, though, of posters talking about high interest rates.

I am happy for this thread to be used for that purpose. I have just changed the title of the thread.

SS2

colsten

Special_Saver2 wrote: »

How would you classify The Co-op's Everyday Rewards? The £4 per month seems taxable as you do not have to do anything to get it other than operate the account, whereas the 5p per debit card transaction sounds more like cashback.

The COOP £4 is the same kind of payment as the Halifax £5. Somewhere someone has quoted the exact HMRC terms that make these payments taxable income. I have been adding the Halifax money to my taxable income all along, and plan to do the same for the COOP reward.

Coop statement on it is a bit opaque: http://www.co-operativebank.co.uk/assets/pdf/bank/currentaccounts/everyday-rewards/benefits-document.pdf

The 5p on the COOP debit card is a discount on a purchase, therefore not taxable.

colsten

Special_Saver2 wrote: »

I have added more details to that entry in post 1 to make my point here clearer:

Free cashback if you pay more than £1,200 per year on household bills by direct debit... NatWest Reward Current Account paying 3% cashback for a £3 per month fee (you need to pay more than £1,200 per year on household bills before you make back the £36 annual fee, assuming you are not paying any tax on NatWest's reward payment; you will have to spend more if it is taxed)

This is a good idea and would also be useful for the Barclays and Santander cashback offers. Although adding more and more information might make the post a bit difficult to digest.

BTW, I see you term the Halifax, Coop and Barclays reward payments "interest". This isn't the right way to say that they are taxable income. Interest is always a %age of a balance at the end of each day. These reward payments do not vary by the size of your balance at the end of each day.

petewales

Hello,

Forgive what i'm sure will come across as laziness, but I have £50,000 lump sum that I would like to put into as high an interest account as possible. I don't have the time to open multiple accounts etc. I also need relatively quick access to my money. I already have a cash ISA.

Thank you!

Pete