Halifax Reward and the new Tax free Savings

me_and

zagfles wrote: »

As I've said several times in this thread - it will make a difference to those who were in the 0% savings band ie earning between 10600 and 15600 last tax year, and who were in the 10% savings band in previous years.

If they declared it as interest, they will have paid too little tax and therefore owe HMRC. The 0%/10% band doesn't apply to "annual payments"

Ah, yes, I'd forgotten about the 10% savings band. I believe people who were in that band would previously have thought they could claim back half the tax they paid, but it turns out they can't.

I think the 0% band does still apply, though - the personal allowance, of income that you can receive without tax, applies whatever the source of the income. It's just not obvious how you'd claim it back if you don't already fill out a tax return.

But the R40 form notes tell you declare it in the interest boxes if you follow the instructions!

Looking at the "Notes for completing form R40", page 4 on boxes 3.1-3.7 does say "income received from building societies, banks...", but the section is called "UK interest and dividends", and the more specific guidance on which box everything goes in on pages 5-6 does specify interest (or dividend) in every case. So I disagree that you should lump these payments in with interest on an R40.

zagfles

me_and wrote: »

Ah, yes, I'd forgotten about the 10% savings band. I believe people who were in that band would previously have thought they could claim back half the tax they paid, but it turns out they can't.

I think the 0% band does still apply, though - the personal allowance, of income that you can receive without tax, applies whatever the source of the income. It's just not obvious how you'd claim it back if you don't already fill out a tax return.

I'm not talking about the personal allowance, ie £10600 last tax year. I'm talking about the additional 0% band for savings income which applies to interest but not to employment earnings, annual payments etc. Which is why I mentioned the 10600-15600 band.

This was the 10% old band but was reduced to 0%.

Looking at the "Notes for completing form R40", page 4 on boxes 3.1-3.7 does say "income received from building societies, banks...", but the section is called "UK interest and dividends", and the more specific guidance on which box everything goes in on pages 5-6 does specify interest (or dividend) in every case. So I disagree that you should lump these payments in with interest on an R40.

Possibly. But it does say to include "income recieved from ....current accounts" and there's nowhere else which tells you where to add reward payments from current accounts. Just a vague "other income" section.

There should be specific guidance from both HMRC and Halifax about how to declare the reward payment. It's not like Halifax is some obscure bank which no-one has heard of. It's a major high street bank and HMRC should be aware of this account and the confusion it causes. There's not even an example of this type of account in the annual payments section of the HMRC manuals. Just very obscure scenarios, not a very common one!

If of course it is in fact an "annual payment".

polymaff

zagfles wrote: »

Possibly. But it does say to include "income recieved from ....current accounts" and there's nowhere else which tells you where to add reward payments from current accounts. Just a vague "other income" section.

Might this possibly be because the R40 is entitled

Income Tax: claim for repayment of tax deducted from savings and investments (R40)

i.e. not for other classes of income?

Time to end your rant?

zagfles

polymaff wrote: »

Might this possibly be because the R40 is entitled

Income Tax: claim for repayment of tax deducted from savings and investments (R40)

i.e. not for other classes of income?

Err...yes but you still need to declare all your income, including employment etc which has a separate section. And AIRI the tax return is similar.

Time to end your rant?

When we get proper guidance from HMRC/Halifax. When I get round to doing my tax return, I'll phone the HMRC helpline and ask them where to declare it. Wonder if I'll get the "correct" answer? I'll declare wherever they tell me to.

polymaff

zagfles wrote: »

Err...yes but you still need to declare all your income, including employment etc which has a separate section. And AIRI the tax return is similar.

You were commenting upon the R40 and its associated documentation, which has nothing to do with all your income, just savings and investments. Ergo, ranting

zagfles wrote: »

When we get proper guidance from HMRC/Halifax. When I get round to doing my tax return, I'll phone the HMRC helpline and ask them where to declare it. Wonder if I'll get the "correct" answer? I'll declare wherever they tell me to.

I've already pointed you to the applicable HMRC documentation - and sympathised with your complaint that Halifax plc should have been more helpful. Isn't it more appropriate that you stop complaining and either obtain guidance - or take that already offered to you?

zagfles

polymaff wrote: »

You were commenting upon the R40 and its associated documentation, which has nothing to do with all your income, just savings and investments. Ergo, ranting



I've already pointed you to the applicable HMRC documentation - and sympathised with your complaint that Halifax plc should have been more helpful. Isn't it more appropriate that you stop complaining and either obtain guidance - or take that already offered to you?

Err..that's what I've just said I'd do! I will phone the SA helpline and ask them. Are you happy now or do you want to carry on ranting

GingerFurball_2

zagfles wrote: »

Yes last year if you earned over the 0% savings band ie about £16k it won't make a difference. But this year it makes a difference even for those in the £16-43k earnings band because "annual payments" aren't included in the PSA! Which is why we need proper unequivocal guidance from Halifax and/or HMRC.

Why would you expect tax guidance from a bank?

The payment isn't savings income. What it needs to be declared as is a matter for HMRC, not Halifax.

zagfles

GingerFurball wrote: »

Why would you expect tax guidance from a bank?

The payment isn't savings income. What it needs to be declared as is a matter for HMRC, not Halifax.

Halifax are deducting tax from the payment on behalf of the customer, so they should know why and what type of income it counts as. It would be good CS to inform customers.

And of course HMRC should equally be clear. Like having an example of a very common high street account in their "annual payments" manual pages. If that's indeed what it is.

colsten

zagfles wrote: »

Halifax are deducting tax from the payment on behalf of the customer, so they should know why and what type of income it counts as. It would be good CS to inform customers.

true.

zagfles wrote: »

And of course HMRC should equally be clear. Like having an example of a very common high street account in their "annual payments" manual pages. If that's indeed what it is.

HMRC already make it clear that people are responsible for declaring all their income.

The number of people with a Reward account (Halifax or Coop or Natwest) is likely to be a minute percentage of taxpayers. Even more minute is the percentage of taxpayers who would be entitled to receive the money tax free.

zagfles

colsten wrote: »

true.

HMRC already make it clear that people are responsible for declaring all their income.

The number of people with a Reward account (Halifax or Coop or Natwest) is likely to be a minute percentage of taxpayers. Even more minute is the percentage of taxpayers who would be entitled to receive the money tax free.

I'd wager that it's far larger than taxpayers fitting some of the other very obscure examples of "annual payments"