Halifax £5 (£6.25) reward is tax free

deptfreemoneytart

I've just been told by HMRC that the £5 (net) reward payment that I get every month from my Halifax Reward Current and Credit Accounts is "NOT" taxable.
If this is correct then Halifax will have to pay me £1.25 for every month that I have been getting the payment for my reward account and my credit card account since Nov. 2010.
If Halifax have been paying the Revenue £1.25 tax on every Reward Account since they started the Reward Accounts, then HMRC will have to reimburse them so that they can pay back all of that money that they owe all of their customers, plus interest (which we might have to pay tax on, the interest that is).
I just have to put in a complaint to the FOS.

PS
I finished paying my mortgage on the 3rd March 2016. 10 year mortgage paid off in 4 years. This was a present to my wife after 50 happy years of marriage.

LuSiVe

Or you could read the million times this has come up already and claim what you can back from HMRC yourself.

PeacefulWaters

Unfortunately, that's not what HMRC told Halifax.

I just have to put in a complaint to the FOS.

You should complain to HMRC who appear to be having problem with their elbows and other body parts.

Goldiegirl

PeacefulWaters wrote: »

Unfortunately, that's not what HMRC told Halifax.

What did HMRC tell Halifax?


I always thought it was up to the account holder to claim back any tax using form R40

PeacefulWaters

Goldiegirl wrote: »

What did HMRC tell Halifax?

That the reward payment remains taxable as income and isn't covered by the personal savings allowance.

I always thought it was up to the account holder to claim back any tax using form R40

It is. If they don't earn enough to pay tax.

The OP states that HMRC say the payment is "not taxable" which is patently incorrect.

HappyMJ

It's tax paid...not tax free. Maybe the wording the HMRC representative used wasn't the right word.

If you're a basic rate taxpayer then there's no more tax to pay as it's already been paid.

If you're a higher rate taxpayer you need to pay more tax on it.

It's a £6.25 payment. £1.25 goes to HMRC, £5 to the account holder.

xylophone

The Halifax Reward is counted as "other taxable income". It is not interest. If it had been, then non- taxpayers could have submitted an R85. - this was not allowed.


The reward is paid net of basic rate income tax

If your income is such that you do not pay tax, then you can reclaim the overpayment from HMRC.

This used to appear on the Halifax site:-

"This payment is 'net' of income tax. This means we pay it after taking off income tax at the rate set by law (currently 20%). If you are 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 we take off income tax. You may reclaim tax from HM Revenue & Customs if the amount of tax we have taken off is more than you have to pay."

B_G_B

xylophone wrote: »

This used to appear on the Halifax site:-

"This payment is 'net' of income tax. This means we pay it after taking off income tax at the rate set by law (currently 20%). If you are 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 we take off income tax. You may reclaim tax from HM Revenue & Customs if the amount of tax we have taken off is more than you have to pay."

Still does pretty much in the Rewards account bumph. Bottom of page 5.
http://static.halifax.co.uk/assets/pdf/bankaccounts/pdf/reward-current-account-guide.pdf

pinkdalek

Oh get a !!!!!!! life and chill :beer:

pinkdalek

deptfreemoneytart wrote: »

I just have to put in a complaint to the FOS.

Really?
Have you registered your complaint with the Halifax first?
The FOS acts when a complaint cannot be settled between the two parties, it is not there as your Daddy when Mummy says no.:rotfl:

PeacefulWaters

pinkdalek wrote: »

Oh get a !!!!!!! life and chill :beer:

While I find the need for the FOS utterly ridiculous, £15 a year is £15 worth having and on a money saving forum establishing the correct way to bag that money doesn't seem unreasonable.

Our supposedly savvy chancellor let himself down by not including this sort of payment in his budget papers and disenfranchised a significant number of current account holders as a result.