Halifax "reward" not "interest"

savings_my_hobby

Apologies if this has been done before.

Please link the other thread if there is one.

Just a heads up about the Halifax reward account, as we know, come April 6th 2016 we will be paid the gross interest rate as opposed to the net interest rate.

This unfortunately does not apply to the Halifax Reward account as the £5 per month is a "reward" therefore is is not classed as interest.

Whilst I was disappointed to learn this I think we can all agree that this is still a worthwhile account and a priority for everyone looking to maximise their cash returns.

Hopefully this enlightens somebody out there.

Biggles

savings_my_hobby wrote: »

Apologies if this has been done before.

Please link the other thread if there is one.

There has been one for quite a while.

Link as requested https://forums.moneysavingexpert.com/discussion/5407456

ColdIron

And this one from this morning
https://forums.moneysavingexpert.com/discussion/5438739

savings_my_hobby

Thanks guys.

I have to admit I have not spent much time on this website lately and had a feeling it might have been covered before although I could not find it on the forum search - perhaps I did't look hard enough.:o

bjbyorkshire

So .... What is the final consensus on what to do about including this in our next year's tax calculation? Do we add the £60 to our income or not?

MDMD

It is definitely income - it appears they are taxed as annual payments from comments on other threads

http://www.hmrc.gov.uk/manuals/saimmanual/saim8010.htm

These are taxed in the same way as interest, so I'd expect they will continue as before

oldfella

and if you are taxed at 0% then you have tax to reclaim

diamonds

MDMD wrote: »

It is definitely income - it appears they are taxed as annual payments from comments on other threads

http://www.hmrc.gov.uk/manuals/saimmanual/saim8010.htm

These are taxed in the same way as interest, so I'd expect they will continue as before

Just to throw a spanner in the works...lol it is not a legal obligation for any bank to pay rewards.

Example...Halifax

If it is £6.25 taxed to £5


Is this not wrong ?


It is not interest but a reward where no asset is exchanged for payment it could possibly fall under Capital Gains Tax ?


That would possibly mean we are all due a tax refund for previous years where rewards are paid from banks being taxed, whereas it is gifted and CGT applies ?

Rich2808

I presume the same applies to switch incentives and referral payments.

PeacefulWaters

Rich2808 wrote: »

I presume the same applies to switch incentives and referral payments.

They're not taxable.

PeacefulWaters

diamonds wrote: »

Just to throw a spanner in the works...lol it is not a legal obligation for any bank to pay rewards.

Example...Halifax

If it is £6.25 taxed to £5


Is this not wrong ?


It is not interest but a reward where no asset is exchanged for payment it could possibly fall under Capital Gains Tax ?


That would possibly mean we are all due a tax refund for previous years where rewards are paid from banks being taxed, whereas it is gifted and CGT applies ?

It's income. Not a capital gain. Hence income tax.