Reward Card (tax on a fiver)

TheTracker

I declare the Halifax Fiver as other taxable income. I'll do the same next year. It has no relevance to interest and so is not part of any rules related to interest allowances.

Consumerist

TheTracker wrote: »

I declare the Halifax Fiver as other taxable income. I'll do the same next year. It has no relevance to interest and so is not part of any rules related to interest allowances.

I hope you also declare the tax which you have already paid on it.

I think I am now convinced that it has nothing to do with savings interest.

ColdIron

bowlhead99 wrote: »

There are tax laws on how such payments of regular income from a commercial organisation should be taxed - such as royalties, the analogy I gave above. Withholding is required at source

Where does this leave Barclay Blue Rewards I wonder, they do not withhold tax. I have been unsure where to declare this on my SA after April

diamonds

PeacefulWaters wrote: »

You are making the rather dramatic mistake of believing a year old a Daily Mail article that epitomises lazy journalism.



From the Halifax website:
http://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account/

This payment is ‘net’ of income tax, which 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 gross amount is £6.25 - this is the amount before income tax is taken off.

Yeeeeee! I didnt see that logged in, so I got a pay rise


Thanks PW!

diamonds

Rich2808 wrote: »

One might suggest it's probably not material for HMRC to get too worked up over.

I think Georgie Tory Boy might differ in opinion there!

Consumerist

ColdIron wrote: »

Where does this leave Barclay Blue Rewards I wonder, they do not withhold tax. I have been unsure where to declare this on my SA after April

Add the gross amount to your taxable income. Any tax due to this income will be collected through PAYE. You may find that HMRC will reduce your tax code for next year to recoup any underpaid tax.

This is only my best guess from what I have gleaned here and elsewhere.

ColdIron

Yes it seems to be income not interest, I do SA so will sort it out there rather than mess about with my tax code for 30 quid or so

It's actually barely worth doing if you pay higher rate tax due to the fee element

£7 per month = £84
After 40% tax this leaves £50.40
Take away the £3 per month fee of £36 leaves £14.40 or £1.20 a month

Consumerist

Well, I came to this thread wondering what to do about the Halifax reward payment and I'm glad to say it's been a really good discussion and I'm now fairly confident about how to treat it.

Thank you all.

changearound

ColdIron wrote: »

Yes it seems to be income not interest, I do SA so will sort it out there rather than mess about with my tax code for 30 quid or so

It's actually barely worth doing if you pay higher rate tax due to the fee element

£7 per month = £84
After 40% tax this leaves £50.40
Take away the £3 per month fee of £36 leaves £14.40 or £1.20 a month

Surely you're taxed on Blue Reward profit i.e. £7-£3 or £4 pm.

So in your example, 40% of £48 or £19.20 would go to HMRC leaving £28.80 profit in a year or £2.40 pm.

Consumerist

changearound wrote: »

Surely you're taxed on Blue Reward profit i.e. £7-£3 or £4 pm.

So in your example, 40% of £48 or £19.20 would go to HMRC leaving £28.80 profit in a year or £2.40 pm.

Unfortunately, I think the tax is on the income, the fact that you spend some of that income on banking services is, as far as HMRC is concerned, irrelevant.

I'd love to be able to offset Santander's £60 pa account fee against the interest earned but I don't think HMRC will buy that !