The Top Easy Access Savings Discussion Area

iNeed2P

MiserlyMartin said:

Has anyone tried arguing with HRMC about Gatehouse and all the other sharia banks that don't pay interest, that because it is not actually interest -  you don't pay tax on it?

😂😂 My, oh my!, gave me a chuckle this morning, stark raving bonkers!

iNeed2P

TheBanker said:

MiserlyMartin said:

Has anyone tried arguing with HRMC about Gatehouse and all the other sharia banks that don't pay interest, that because it is not actually interest -  you don't pay tax on it?

It's still income. If you try the 'it's not interest' argument then they may agree and therefore not allow it to form part of your PSA! 

Delusional!

TiVo_Lad

ForumUser7 said:

Effective 15th June, Harpenden BS Online Instant Access Issue 1 (NLA) -> 3.84% Source ~ https://www.harpendenbs.co.uk/savings/personal-savings-accounts/

https://www.harpendenbs.co.uk/message-to-our-savers-rate-increases-active-from-thursday-15th-june-and-saturday-1st-july/

The £10K a day max transfer was a PITA. I'm not sure I can be bothered to refill it with upward movements on other accounts likely this coming week.

MiserlyMartin

uptdale said:

MiserlyMartin said:

Has anyone tried arguing with HRMC about Gatehouse and all the other sharia banks that don't pay interest, that because it is not actually interest -  you don't pay tax on it?

It's not interest, but the tax law treats it as if it is interest.  There's a summary in HMRC's Tax Manual here: https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2250

So tax law is not sharia compliant then. I guess certain people will have to hand it back or donate it to charity !

MiserlyMartin

iNeed2P said:

MiserlyMartin said:

Has anyone tried arguing with HRMC about Gatehouse and all the other sharia banks that don't pay interest, that because it is not actually interest -  you don't pay tax on it?

😂😂 My, oh my!, gave me a chuckle this morning, stark raving bonkers!

I thought I might try and cheer some of you up this weekend

TheBanker

MiserlyMartin said:

uptdale said:

MiserlyMartin said:

Has anyone tried arguing with HRMC about Gatehouse and all the other sharia banks that don't pay interest, that because it is not actually interest -  you don't pay tax on it?

It's not interest, but the tax law treats it as if it is interest.  There's a summary in HMRC's Tax Manual here: https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2250

So tax law is not sharia compliant then. I guess certain people will have to hand it back or donate it to charity !

It's income, so subject to income tax. Tax law treats it as interest i.e. it can count against the PSA. The alternatives would be to treat it as earned income, which would be detrimental to taxpayers who could no longer make use of their PSA or the nil rate savings band (if applicable). Tax law is sharia compliant because I'm not aware of anything in Sharia Law that says you must not pay tax on your income. The fact HMRC treat it as interest for the purposes of calculating tax due, does not mean it is interest in the eyes of Sharia Law. 

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

RobfromCornwall

TheBanker said:

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

And was that possible?!

iNeed2P

RobfromCornwall said:

TheBanker said:

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

And was that possible?!

What d'ya reckon? Bank and customers defrauding HMRC.

TheBanker

RobfromCornwall said:

TheBanker said:

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

And was that possible?!

Yes

iNeed2P said:

RobfromCornwall said:

TheBanker said:

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

And was that possible?!

What d'ya reckon? Bank and customers defrauding HMRC.

Nobody was defrauding anybody. The customer received 0% interest. In those days the bank paid interest net of basic rate tax, so we made sure to deduct 20% of nothing and send it to HMRC.

ircE

TheBanker said:

RobfromCornwall said:

TheBanker said:

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

And was that possible?!

Yes

iNeed2P said:

RobfromCornwall said:

TheBanker said:

Years ago before Sharia banking products were common, the bank I worked for often had customers asking us to set their interest rate to 0%. 

And was that possible?!

What d'ya reckon? Bank and customers defrauding HMRC.

Nobody was defrauding anybody. The customer received 0% interest. In those days the bank paid interest net of basic rate tax, so we made sure to deduct 20% of nothing and send it to HMRC.

Very off-topic at this point but I can't help but wonder - why not just create a current account rather than open a savings account and ask the rate to be set to 0?