Halifax Reward Account changing to £3 charge with “lifestyle rewards”

pphillips

ZeroSum said:

pphillips said:

Not bad, getting 1% cashback on £500 of debit card spending.
However, I don't understand why Halifax deduct tax when almost everyone gets an personal savings allowance of either £500 or £1000 each tax year.
Also regarding debit card payments to savings accounts, I wonder if these can be set up to take recurring payments each month.

Cos its a reward & not interest or cashback

If you take co-ops everyday rewards, they split it in 2. The £4 is a reward (paid as £5 net of tax) then the £1.50 is cashback so not taxable as its 5p per debit card transaction. 

And where do you enter it on the tax return if it's not interest?
I don't think Barclays deduct tax from my blue rewards.

ZeroSum

pphillips said:

ZeroSum said:

pphillips said:

Not bad, getting 1% cashback on £500 of debit card spending.
However, I don't understand why Halifax deduct tax when almost everyone gets an personal savings allowance of either £500 or £1000 each tax year.
Also regarding debit card payments to savings accounts, I wonder if these can be set up to take recurring payments each month.

Cos its a reward & not interest or cashback

If you take co-ops everyday rewards, they split it in 2. The £4 is a reward (paid as £5 net of tax) then the £1.50 is cashback so not taxable as its 5p per debit card transaction. 

And where do you enter it on the tax return if it's not interest?
I don't think Barclays deduct tax from my blue rewards.

Cos barclays is cashback. Its paid as £3.50 per DD.
I have no idea where you'd put it in tax return. Is this to claim it back? If so is it worth it? 

Tildaplum

there is a space on the tax return for 'any other income'

latinaid

Tildaplum said:

there is a space on the tax return for 'any other income'

But is there a space to say how much tax has already been deducted from that other income? which is what's needed in order to claim the tax back.
I must say I don't understand why Halifax needs to deduct tax before paying - surely it's up to the individual to declare the income and pay the tax if required (which it won't always be)?

masonic

latinaid said:

Tildaplum said:

there is a space on the tax return for 'any other income'

But is there a space to say how much tax has already been deducted from that other income? which is what's needed in order to claim the tax back.

Yes there is, see below for an example from one of my tax returns:

(for the avoidance of doubt, if you fill out a tax return, you need to declare this income whether or not you are trying to claim the tax back)

latinaid said:

I must say I don't understand why Halifax needs to deduct tax before paying - surely it's up to the individual to declare the income and pay the tax if required (which it won't always be)?

It is up to HMRC as to which forms of income need to have tax deduced up front. Until recently, basic rate tax was deducted from interest, it still is for interest paid on non-mainstream investments such as mini-bonds.

onwards&upwards

Is anyone else considering switching this to M&S now to get the 2.75% RS while it still exists?  Just a shame there’s no switching offer at the mo.

colsten

onwards&upwards said:

Is anyone else considering switching this to M&S now to get the 2.75% RS while it still exists?  Just a shame there’s no switching offer at the mo.

If you don't have the M&S RS already anyway, it may be a good idea to try to get it. Big shame you didn't use the excellent switch offer before it vanished.

However, I would not switch a Halifax Reward account as it will be worth £60 a year, whilst the max you can make from an M&S RS is £45. In any case, it should not be an either/or decision - why not have both accounts?

onwards&upwards

colsten said:

onwards&upwards said:

Is anyone else considering switching this to M&S now to get the 2.75% RS while it still exists?  Just a shame there’s no switching offer at the mo.

If you don't have the M&S RS already anyway, it may be a good idea to try to get it. Big shame you didn't use the excellent switch offer before it vanished.

However, I would not switch a Halifax Reward account as it will be worth £60 a year, whilst the max you can make from an M&S RS is £45. In any case, it should not be an either/or decision - why not have both accounts?

I’m not in a position to meet the new requirements, unfortunately.  

pphillips

ZeroSum said:

pphillips said:

ZeroSum said:

pphillips said:

Not bad, getting 1% cashback on £500 of debit card spending.
However, I don't understand why Halifax deduct tax when almost everyone gets an personal savings allowance of either £500 or £1000 each tax year.
Also regarding debit card payments to savings accounts, I wonder if these can be set up to take recurring payments each month.

Cos its a reward & not interest or cashback

If you take co-ops everyday rewards, they split it in 2. The £4 is a reward (paid as £5 net of tax) then the £1.50 is cashback so not taxable as its 5p per debit card transaction. 

And where do you enter it on the tax return if it's not interest?
I don't think Barclays deduct tax from my blue rewards.

Cos barclays is cashback. Its paid as £3.50 per DD.
I have no idea where you'd put it in tax return. Is this to claim it back? If so is it worth it? 

So confusing that Halifax, Co-op and Barclays all have reward accounts with different tax treatment.

colsten

onwards&upwards said:

I’m not in a position to meet the new requirements, unfortunately.  

If you are meeting the current ones, why can't you meet the new ones? Instead of cycling £750 once, cycle it twice. Delete the DDs, they are no longer needed after June 1. Syphon £500 by debit card into a savings account, and send it back from there to your main current account. Not as automated / automate-able as the current arrangements, but you can get two-and-a-half times as much reward each month.