Halifax £5 Reward

redcroft1

I had expected this month's reward to be paid gross, but it wasn't. Previously I had thought that the bank made it clear the reward was actually £6.25 but they deducted basic rate tax as per the regulations. However, despite the rules changing the reward is still paid net. It feels like it was treated as interest before but not now.
Just wondered if others had the same expectation?

LuSiVe

It's not interest. What would the interest rate be when you can have a zero balance for all but 10 seconds of the month?

This has been covered a *lot* already.

bowlhead99

The only reason you feel it was treated like interest was because they withheld basic rate tax on it. But as explained above it can't possibly be savings interest being paid out at an interest rate because it's the same amount whether they are looking after £0.01 or £100,000 for you on average over the course of the month.

It's a contractual annual payment of £75 a year on which they withhold basic rate tax because the tax laws say they have to - like on royalties for example. If you are a higher rate taxpayer you need to pay extra tax. If you're not a taxpayer because you have plenty of spare income allowance you'll be owed something back. The majority will be basic rate and not do anything. But it isn't "savings interest", so a savings interest allowance or a starting rate of 0% for savings interest income does you no good.

zolablue25

Wow! I can't believe this question is STILL coming up.

polymaff

zolablue25 wrote: »

Wow! I can't believe this question is STILL coming up.

...and it will again.

And again.

Cisco001

anyone had annual statement from Halifax?

I seems to remember they classify the 'reward' as 'interest'??

spagnut

Cisco001 wrote: »

anyone had annual statement from Halifax?

I seems to remember they classify the 'reward' as 'interest'??

Having re-read the terms and conditions, it seems that it was always classified as income and the basic rate income tax was deducted at source. Bah - was hoping for a bit more each month

bigadaj

You think you've got problems, yet again some of my interest payments weren't made on the first of the month.......

Or should I start a new thread?

polymaff

Cisco001 wrote: »

anyone had annual statement from Halifax?

I seems to remember they classify the 'reward' as 'interest'??

I have - and they don't.

polymaff

bigadaj wrote: »

You think you've got problems, yet again some of my interest payments weren't made on the first of the month.......

Or should I start a new thread?

First of the month? First working day of the month? At the start of the relevant day? At the end of the relevant day?

This month's start seems to be generating a lot of panic

bowlhead99

Cisco001 wrote: »

anyone had annual statement from Halifax?

I seems to remember they classify the 'reward' as 'interest'??

That sounds unlikely, given their T&Cs are very careful not to describe it as interest, always referring to it as a (taxable) 'reward payment'

If they tried to explain to HMRC that the ongoing contractual payments were not income to you, honest guv, and merely represented them paying you a billion percent AER on your few pennies of account balance - so you could then receive that money tax free within your annual savings interest allowance - HMRC would have them in court for running a dodgy tax avoidance scheme.

So, Halifax are not going to call it interest when it isn't, because it's really not worth paying the millions in fines and loss of reputation.