Halifax £5 Reward and new tax on interest rules

alembicbassman

For the past few years my annual income has come in under my personal allowance tax threshold.

I have a Halifax Reward Current account. It pays £5 a month net provided you meet the terms of the account.

I have been able to claim the £1.25 a month tax back from HMRC every year filling in form R60, which comes to £15.

Now the rules have changed am I going to to be able to claim the £1.25 a month back or will Halifax just not pay HMRC the tax?

HappyMJ

alembicbassman wrote: »

For the past few years my annual income has come in under my personal allowance tax threshold.

I have a Halifax Reward Current account. It pays £5 a month net provided you meet the terms of the account.

I have been able to claim the £1.25 a month tax back from HMRC every year filling in form R60, which comes to £15.

Now the rules have changed I am going to to be able to claim the £1.25 a month back or will Halifax just not pay HMRC the tax?

The £5 is not interest. You don't have to have any balance at all to get it. You can move money in and out on the same day and keep a zero balance. It's income and therefore taxed. They are still obliged to deduct the tax on the payment and if you don't earn enough you can reclaim the tax paid. If you're a higher rate tax payer there is more tax to pay.

It's something to worry about next year anyway.

Dobbibill

Have a look at this thread.......https://forums.moneysavingexpert.com/discussion/5407456

It seems nothing will change for this account with new PSA rules as this is a reward payment, not interest.

alembicbassman

Thanks.


Just a bit confused because HMRC see it as interest and Halifax put it on my annual statement as interest.

colsten

alembicbassman wrote: »

Just a bit confused because HMRC see it as interest and Halifax put it on my annual statement as interest.

HMRC only see it as interest if you tell them you received it as interest. You should have told them that it is "Other taxable income".

Halifax have put it as Reward payment on my annual statement, and I strongly suspect they did the same on yours.

alembicbassman

Hehe, been doing it wrong all these years.

So long as I can still get an extra £15 a year, all is good.

castle96

Colsten

under "other taxable income" do i insert £75 (or £60), to reclaim the £15

colsten

Halifax Reward annual statement for 2015 also lists the reward payment. I haven't kept statements for prior years but I would be surprised if the Reward payment has ever been called an interest payment.

Whilst we still had 20% tax deducted from all interest payments, it probably didn't matter too much whether you declared the reward payment as interest, as the tax banks had to deduct was the same for both, interest and rewards. It's now different, and the reward payment should be properly declared as 'Other taxable income'.

colsten

castle96 wrote: »

Colsten

under "other taxable income" do i insert £75 (or £60), to reclaim the £15

I am no tax inspector, so don't take my word for it but I believe it asks you for the gross amount (£75) and the amount of tax paid (£15).

badger09

colsten wrote: »

I am no tax inspector, so don't take my word for it but I believe it asks you for the gross amount (£75) and the amount of tax paid (£15).

I [STRIKE]am[/STRIKE] (was:p).

It asks for 'Other taxable income – before expenses and tax
taken off' and 'Any tax taken off'

so your belief is correct:)