Barclays Blue Rewards - tax status

polymaff

bigadaj wrote: »

Trust you as taking full details of these conversations including time, date and name, as with many financial institutions their call centre staff sent often aren't very well trained, so when it comes to reviewing your tax return the fact you have been told something over the phone may not carry much weight.

It won't. I've been to Tribunals in these matters and, although the judgement of the tribunal in my experience has been to refuse all penalties and interest demanded by HMRC, the decision about the fundamental liability is that advice from HMRC staff commits HMRC to nothing.

“Power without responsibility — the prerogative of the harlot throughout the ages.” Stanley Baldwin, 1931

datlex

bigadaj wrote: »

Trust you as taking full details of these conversations including time, date and name, as with many financial institutions their call centre staff sent often aren't very well trained, so when it comes to reviewing your tax return the fact you have been told something over the phone may not carry much weight.

It was via their chat service, I have kept a copy of the chat. The details of the Blue Rewards expected earning have been registered against my tax account.

FOREVER21

HMRC seem to want it all their own way.

I too don't think they can treat it as interest, on what amount of capital has the interest been based.

My main gripe however being a Barclays customer is, not only are they wanting to tax the actual amount I get £4 , but they are also suggesting that the additional £3 , which I never receive having been deducted as a fee is taxed.
Surely this can't be right, I wonder where in HMRC codes does it say they can tax money I have not had, nor will I ever receive.

polymaff

I reckon that the fee satisfies the "wholly and necessary" test for a valid expense; so it is a legitimate expense, and therefore offsetable against the Blue Reward payment.

premierfella

Since £7 goes into the separate wallet and the fee gets taken directly from the bank account, clearly the actual amount received is £7 and HMRC consider the £3 a separate charge (which it is).

Barclays could have just done what Lloyds do, but instead chose a route that adds to HMRC coffers to the detriment of their customers, presumably thinking that seeing £7 a month going into the wallet would feel greater to customers than just paying true £4 net value in the first place.

At least they are looking into it (although I suspect part of that revamp will no doubt involve cutting the value of the reward or making it harder to earn).

FOREVER21

polymaff wrote: »

I reckon that the fee satisfies the "wholly and necessary" test for a valid expense; so it is a legitimate expense, and therefore offsetable against the Blue Reward payment.

Unfortunately HMRC don't see it that way either as other posts have said the fee can't be offset against any tax due.

polymaff

FOREVER21 wrote: »

Unfortunately HMRC don't see it that way either as other posts have said the fee can't be offset against any tax due.

You may be missing the point. "HMRC" who? Individual agents make mistake after mistake.

luffa

premierfella wrote: »

At least they are looking into it (although I suspect part of that revamp will no doubt involve cutting the value of the reward or making it harder to earn).

They have already cut the value of the extra rewards. They used to give £3 extra for home insurance (any of building or contents - I have contents only). They've now made it mandatory to get both building and contents insurance to get the £3 reward. They only give £1 for contents insurance now.

datlex

FOREVER21 wrote: »

HMRC seem to want it all their own way.

I too don't think they can treat it as interest, on what amount of capital has the interest been based.

My main gripe however being a Barclays customer is, not only are they wanting to tax the actual amount I get £4 , but they are also suggesting that the additional £3 , which I never receive having been deducted as a fee is taxed.
Surely this can't be right, I wonder where in HMRC codes does it say they can tax money I have not had, nor will I ever receive.

All I know is I contacted HMRC about my account. During my chat conversation I asked them how I formally declare the amount I earned, I am PAYE so it is not just a case of putting in a different box on a tax return. The amount has been registered against my tax account. I was told after this had been registered that I had no extra tax to pay as it counts as interest. Should this change I have already declared the amount. Personally I would suggest covering your behind by declaring the earnings. Should tax status change you have already declared the earnings.
With regards to the £3 you do receive it in your rewards account. The £3 comes out of the bank account that earns the rewards amount.

burnoutbabe

they have changed their mind again, its now been classified as cashback per Martin's latest email.
Glad I did not bother amending my already submitted tax return for this!