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

King_Of_Fools

Zanderman said:

gt94sss2 said:

Fingerbobs said:

I've just received my fiver as well. Now regretting choosing the £5k balance option instead of the £500 DC spend. 

For those who are non taxpayers, the 5k option is actually worth £6.25..
You can't claim the tax back with the DC spend option

Why not? 
Am I missing something here? 
The £5 monthly reward - which is not interest - is paid net of tax whichever way (the £5k in the account way or the £500 debit card spend way) you earn it isn't it?  And if net of tax the tax can be claimed back regardless of which way it was 'earned'.

The £5 reward for holding £5000 in the account is classed as income so is taxable.
The £5 reward for spending £500 is classed as cashback so is not taxable.
It is in the T&Cs:
https://www.halifax.co.uk/assets/pdf/bankaccounts/pdf/banking-offers-guide.pdf
For the £5 for £5,000 offer
If you choose to keep £5,000 or more in your account, the Monthly Reward will be paid ‘net’ after the deduction of income tax at the rate set by law (currently 20%). The gross value of the Monthly Reward before income tax is taken off is £6.25. If you’re a higher rate tax payer, you may have to pay extra income tax on the Monthly Reward. If we have deducted more tax than you have to pay you may be able to claim it back from HMRC.

Zanderman

King_Of_Fools said:

Zanderman said:

gt94sss2 said:

Fingerbobs said:

I've just received my fiver as well. Now regretting choosing the £5k balance option instead of the £500 DC spend. 

For those who are non taxpayers, the 5k option is actually worth £6.25..
You can't claim the tax back with the DC spend option

Why not? 
Am I missing something here? 
The £5 monthly reward - which is not interest - is paid net of tax whichever way (the £5k in the account way or the £500 debit card spend way) you earn it isn't it?  And if net of tax the tax can be claimed back regardless of which way it was 'earned'.

The £5 reward for holding £5000 in the account is classed as income so is taxable.
The £5 reward for spending £500 is classed as cashback so is not taxable.
It is in the T&Cs:
https://www.halifax.co.uk/assets/pdf/bankaccounts/pdf/banking-offers-guide.pdf
For the £5 for £5,000 offer
If you choose to keep £5,000 or more in your account, the Monthly Reward will be paid ‘net’ after the deduction of income tax at the rate set by law (currently 20%). The gross value of the Monthly Reward before income tax is taken off is £6.25. If you’re a higher rate tax payer, you may have to pay extra income tax on the Monthly Reward. If we have deducted more tax than you have to pay you may be able to claim it back from HMRC.

Ok, that explains things - a bit.
But those T&C's make no reference to the £5 reward for £500 spend being 'classed as cashback'.  Indeed there is no suggestion that it is any different - except for that para you quote about the reward for £5000 balance. 
So, again unless I'm missing something, where is it stated that the Reward for £500 spend is not net?
Halifax Rewards have 'always' been net.  Where is the statement that this has changed?
I'm happy to be corrected - but so far all I'm seeing is a statement about one Reward, not a statement about the other.

masonic

King_Of_Fools said:

Zanderman said:

gt94sss2 said:

Fingerbobs said:

I've just received my fiver as well. Now regretting choosing the £5k balance option instead of the £500 DC spend. 

For those who are non taxpayers, the 5k option is actually worth £6.25..
You can't claim the tax back with the DC spend option

Why not? 
Am I missing something here? 
The £5 monthly reward - which is not interest - is paid net of tax whichever way (the £5k in the account way or the £500 debit card spend way) you earn it isn't it?  And if net of tax the tax can be claimed back regardless of which way it was 'earned'.

The £5 reward for holding £5000 in the account is classed as income so is taxable.
The £5 reward for spending £500 is classed as cashback so is not taxable.
It is in the T&Cs:
https://www.halifax.co.uk/assets/pdf/bankaccounts/pdf/banking-offers-guide.pdf
For the £5 for £5,000 offer
If you choose to keep £5,000 or more in your account, the Monthly Reward will be paid ‘net’ after the deduction of income tax at the rate set by law (currently 20%). The gross value of the Monthly Reward before income tax is taken off is £6.25. If you’re a higher rate tax payer, you may have to pay extra income tax on the Monthly Reward. If we have deducted more tax than you have to pay you may be able to claim it back from HMRC.

Interesting. That document implies (by omission) that the £5 for debit card spend is cashback, but does not state this either way. I had assumed both were annual payments. It would be nice to see something from Halifax confirming they will be treating the £5 for debit card spending as cashback.

Zanderman

masonic said:

King_Of_Fools said:

Zanderman said:

gt94sss2 said:

Fingerbobs said:

I've just received my fiver as well. Now regretting choosing the £5k balance option instead of the £500 DC spend. 

For those who are non taxpayers, the 5k option is actually worth £6.25..
You can't claim the tax back with the DC spend option

Why not? 
Am I missing something here? 
The £5 monthly reward - which is not interest - is paid net of tax whichever way (the £5k in the account way or the £500 debit card spend way) you earn it isn't it?  And if net of tax the tax can be claimed back regardless of which way it was 'earned'.

The £5 reward for holding £5000 in the account is classed as income so is taxable.
The £5 reward for spending £500 is classed as cashback so is not taxable.
It is in the T&Cs:
https://www.halifax.co.uk/assets/pdf/bankaccounts/pdf/banking-offers-guide.pdf
For the £5 for £5,000 offer
If you choose to keep £5,000 or more in your account, the Monthly Reward will be paid ‘net’ after the deduction of income tax at the rate set by law (currently 20%). The gross value of the Monthly Reward before income tax is taken off is £6.25. If you’re a higher rate tax payer, you may have to pay extra income tax on the Monthly Reward. If we have deducted more tax than you have to pay you may be able to claim it back from HMRC.

Interesting. That document implies (by omission) that the £5 for debit card spend is cashback, but does not state this either way. I had assumed both were annual payments. It would be nice to see something from Halifax confirming they will be treating the £5 for debit card spending as cashback.

Exactly.  The document quoted omits the key information - and absence of information shouldn't be assumed to mean anything - it may just be a drafting error in the document.  If Halifax have re-defined the one version of the Reward as 'cashback' why don't they tell us? Have they told us?  if so where and when?

According to Which (which is not always reliable of course, but then what is these days):

Do I owe tax from my bank account?

Both Halifax and The Co-operative Bank offer rewards that fall into the ‘annual payments’ category, which means they deduct basic-rate tax of 20% before paying rewards.

The gross monthly reward for the Halifax Reward account is £6.25, but you receive a net reward of £5. The gross monthly reward for the Co-op Everyday Rewards account is £5, but you receive a net reward of £4.

You don’t owe any extra tax if you are a basic-rate taxpayer.

Previously, Barclays Blue Rewards customers earning the £7-per-month Loyalty Reward were told to declare this to HMRC, via self-assessment, or by getting a new tax code. This reward was deemed to be a ‘miscellaneous payment’, because there is a £3 monthly fee.

In December 2016, Barclays reclassified this perk as cashback – to be precise, you earn £3.50 cashback monthly for your first two direct debit payments – to ensure that it is no longer subject to tax. 

All other Blue Rewards current account benefits have never been subject to income tax as these are also cashback deals for holding specific products (mortgage, insurance, loans).

https://www.which.co.uk/money/banking/bank-accounts/best-bank-accounts/best-bank-accounts-for-cashback-afkus9c34n29

King_Of_Fools

Zanderman said:

King_Of_Fools said:

Zanderman said:

gt94sss2 said:

Fingerbobs said:

I've just received my fiver as well. Now regretting choosing the £5k balance option instead of the £500 DC spend. 

For those who are non taxpayers, the 5k option is actually worth £6.25..
You can't claim the tax back with the DC spend option

Why not? 
Am I missing something here? 
The £5 monthly reward - which is not interest - is paid net of tax whichever way (the £5k in the account way or the £500 debit card spend way) you earn it isn't it?  And if net of tax the tax can be claimed back regardless of which way it was 'earned'.

The £5 reward for holding £5000 in the account is classed as income so is taxable.
The £5 reward for spending £500 is classed as cashback so is not taxable.
It is in the T&Cs:
https://www.halifax.co.uk/assets/pdf/bankaccounts/pdf/banking-offers-guide.pdf
For the £5 for £5,000 offer
If you choose to keep £5,000 or more in your account, the Monthly Reward will be paid ‘net’ after the deduction of income tax at the rate set by law (currently 20%). The gross value of the Monthly Reward before income tax is taken off is £6.25. If you’re a higher rate tax payer, you may have to pay extra income tax on the Monthly Reward. If we have deducted more tax than you have to pay you may be able to claim it back from HMRC.

Ok, that explains things - a bit.
But those T&C's make no reference to the £5 reward for £500 spend being 'classed as cashback'.  Indeed there is no suggestion that it is any different - except for that para you quote about the reward for £5000 balance. 
So, again unless I'm missing something, where is it stated that the Reward for £500 spend is not net?
Halifax Rewards have 'always' been net.  Where is the statement that this has changed?
I'm happy to be corrected - but so far all I'm seeing is a statement about one Reward, not a statement about the other.

Indeed, it is only implied that the £5 for £500 spend is cashback and so not taxable. However, the fact that the T&Cs single out one of the six possible combinations is notable.
The Halifax Bank Account reward has always been paid net in the past but it never had spending conditions in the past. In fact, Halifax used to offer £5 cashback per month for spending £500 on the Clarity Credit Card and that was not taxable.
I guess, we will only really know for sure at the end of the tax year when Halifax send out their Annual statement for the account.

Zanderman

Yes, I used to get the £5 on the clarity card spend too.
I still see no evidence anything has changed - apart from that cryptic (by omission) para in the T&Cs. 
I would hope we know before the year end - by asking! 
Which I will do.

masonic

Zanderman said:

According to Which (which is not always reliable of course, but then what is these days):

The Which information will almost certainly not have been updated since the previous Reward scheme, so not of much use to us. I can understand it when companies clam up in relation to giving tax advice, but Halifax should be able to state whether or not they are withholding tax on both forms of the reward and refer to it as cashback if that's how they are treating it for tax purposes - as pointed out, in the past they called it cashback when it was paid for the credit card.

portenio

masonic said:

Zanderman said:

According to Which (which is not always reliable of course, but then what is these days):

The Which information will almost certainly not have been updated since the previous Reward scheme, so not of much use to us. I can understand it when companies clam up in relation to giving tax advice, but Halifax should be able to state whether or not they are withholding tax on both forms of the reward and refer to it as cashback if that's how they are treating it for tax purposes - as pointed out, in the past they called it cashback when it was paid for the credit card.

From what I recall the statement always showed the transaction as "REWARD (NET)".
Has anyone checked it for the 13/7 DC spend reward?
Still it's not a real proof as it could be that IT (who else) haven't updated the narrative to what it should now be.
Best way will be to call, but CS are not reliable either LOL.
Then....wait for annual statement I'm afraid.

polymaff

portenio said:

From what I recall the statement always showed the transaction as "REWARD (NET)".
Has anyone checked it for the 13/7 DC spend reward?

The transaction  is described as REWARD EXTRA, so no help there.

afis1904

Does it always take a bit for the £1500 paid in to show as done on the rewards tracker?