Halifax £5 (£6.25) reward is tax free

Westie983

PeacefulWaters wrote: »

Yes, I'm highlighting this differentiation. It is what it is. But is an oddity tax wise as a result. Earn a fiver at one bank, pay no tax, earn it at another, pay tax.

Which goes back to the thrust of the whole thread.

Yes because one is interest and one is a reward payment so can not be compared, tax is taken from the reward payment but not from the interest.

If you want the tax back that has been taken from the reward then fill out a R40 form and then your issue about oddity is no more,

It has always been a reward payment and therefore will continue to pay out at £5 a month, if you are entitled to tax back you can claim it, like you have been able to do before the PSA came in.

PeacefulWaters

Westie983 wrote: »

Yes because one is interest and one is a reward payment so can not be compared

Of course they can be compared.

tax is taken from the reward payment but not from the interest.

See, you just compared them.

If you want the tax back that has been taken from the reward then fill out a R40 form and then your issue about oddity is no more

Unless, as is reasonable for any tax paying layman, you'd have expected to be able to receive your reward payment gross. Why HMRC have chosen to treat this form of income as something that falls outside of the scope of PSA is an oddity.

It has always been a reward payment and therefore will continue to pay out at £5 a month, if you are entitled to tax back you can claim it, like you have been able to do before the PSA came in.

But you can't claim it back if you're a taxpayer. Which is the point of my posts that you seem determined to ignore in order to play the Halifax's party line. Even though I'm pointing the finger at HMRC.

Ashen

PeacefulWaters wrote: »

Unless, as is reasonable for any tax paying layman, you'd have expected to be able to receive your reward payment gross. Why HMRC have chosen to treat this form of income as something that falls outside of the scope of PSA is an oddity.

No, if HMRC suddenly reclassified something that has for many years been classified as taxable income (and not interest since it doesn't fit that definition), that would be an oddity. But I get that you want £6.25 a month and are going to justify that with whatever argument you can.

PeacefulWaters

Ashen wrote: »

No, if HMRC suddenly reclassified something that has for many years been classified as taxable income (and not interest since it doesn't fit that definition), that would be an oddity. But I get that you want £6.25 a month and are going to justify that with whatever argument you can.

As a 40% taxpayer earning more than £500 in interest elsewhere I wouldn't qualify.

So you're wrong.

Ballard

PeacefulWaters wrote: »

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As a 40% taxpayer earning more than £500 in interest elsewhere I wouldn't qualify.

So you're wrong.

I really don't understand your argument at all. Everyone now has a tax free allowance for interest. The Halifax reward is not interest and has never been classed as such. This isn't something that HMRC has messed up on. It's simply not related. It's really perfectly clear.

agrinnall

PeacefulWaters wrote: »

Those account holders have been disenfranchised.

So I was right, you don't know what the word "disenfranchised" means.

https://www.vocabulary.com/dictionary/disenfranchised

PeacefulWaters

Ballard wrote: »

I really don't understand your argument at all. Everyone now has a tax free allowance for interest. The Halifax reward is not interest and has never been classed as such. This isn't something that HMRC has messed up on. It's simply not related. It's really perfectly clear.

Of course you get the argument. You may not agree with it but that's fine.

Most customers who pay tax will not distinguish between reward and interest. Indeed, the number of people posting about the issue in new threads backs this up.

I get it. You get it. From the OP it's clear HMRC staff don't get it and neither does the person who started the thread who has made an idiotic decision to waste the resources of the FOS.

The bottom line is that the HMRC decision to exclude reward payments from PSA isn't logical. It simply shows a lack of understanding of the current account market.

Halifax will either lobby or change their product offering. Don't expect your fivers to last too long into the next tax year.

PeacefulWaters

agrinnall wrote: »

So I was right, you don't know what the word "disenfranchised" means.

https://www.vocabulary.com/dictionary/disenfranchised

Or see definition 4 for the verb in dictionary.com.

Ballard

PeacefulWaters wrote: »

Of course you get the argument. You may not agree with it but that's fine.

Most customers who pay tax will not distinguish between reward and interest. Indeed, the number of people posting about the issue in new threads backs this up.

I get it. You get it. From the OP it's clear HMRC staff don't get it and neither does the person who started the thread who has made an idiotic decision to waste the resources of the FOS.

The bottom line is that the HMRC decision to exclude reward payments from PSA isn't logical. It simply shows a lack of understanding of the current account market.

Halifax will either lobby or change their product offering. Don't expect your fivers to last too long into the next tax year.

No. I really don't understand the argument. The rule is very clear. Everyone has an allowance for interest to be tax free. This is not interest. It is therefore not tax free.

I would be surprised if this was not considered when it was being drawn up for the budget but they opted not to include such payments.

You have a completely different opinion to me and neither of us are going to change so let's just leave it at that. There seems little to gain by us both continually restating our view.

Westie983

PeacefulWaters wrote: »

Halifax will either lobby or change their product offering. Don't expect your fivers to last too long into the next tax year.

Not worth Lobbying is its interest that is now paid tax free as part of the PSA, which has been explained to death now, and the £5 rewards have been going for a good few years now, after all its a compromise to the HICA, that used to be offered.

I will await the next person who posts the same thing next month, moaning about the loss of £1.25 but doesn't want to claim it back if entitled, and if not entitled, accept the £60 or move to an account that gives you interest, and not a reward payment.

I accept your argument, but don't agree with it, just like you dont agree with me, thats fine, each entitled to individual opinions.