Natwest Reward - paid gross or net of tax

Previously reclaimed tax on Halifax and Co-op monthly rewards using R40 form, but cant find any info on Natwest Reward? Is it paid gross or net?

Comments

  • Fairly sure NatWest/RBS rewards are considered "cashback", which means it is there is no additional tax to pay/reclaim
  • Have just opened a NatWest account, and my actions qualify for their total £5 a month (£60 p.a.) "Rewards".
    My total interest income exceeds £1000 p.a. and this will be my first year of tax assessment. Do I include it as income ?
    "Rewards" are not interest, they're unrelated to a capital - Natwest "interest" is paid separately.
     "Rewards" are put into a separate account, customers only paid for specific actions each month.
    I cant find anything specific, although it seems Halifax offer similar incentive which is taxfree.
    Is there a source of (tax-qualified) advice, please ?
  • masonic
    masonic Posts: 22,845
    Photogenic Name Dropper First Post First Anniversary
    Forumite
    edited 18 December 2023 at 8:08PM
    Silvabod said:
    Have just opened a NatWest account, and my actions qualify for their total £5 a month (£60 p.a.) "Rewards".
    My total interest income exceeds £1000 p.a. and this will be my first year of tax assessment. Do I include it as income ?
    "Rewards" are not interest, they're unrelated to a capital - Natwest "interest" is paid separately.
     "Rewards" are put into a separate account, customers only paid for specific actions each month.
    I cant find anything specific, although it seems Halifax offer similar incentive which is taxfree.
    Is there a source of (tax-qualified) advice, please ?
    Some rewards can be considered annual payments. They would fit all of the following criteria:
    - They are made under legal obligation (i.e. a binding contract),
    - They must be recurring or capable of recurring over a period of at least one year,
    - They must consist of income for the recipient, not a return of their capital (such as cashback), AND
    - They must be 'pure income profit' (in other words they must not require the recipient to do any work in return for the payment)
    The example of Halifax Reward Extras is an interesting one, because one type of reward (for spending on a debit card) is cashback, not an annual payment, but the other type (for keeping cash in the account) is treated as an annual payment. Providers must deduct tax at source from annual payments.
    The case of Natwest also has nuance: the reward for paying out direct debits (set at a minimum value of £2 for good reason) and debit card spending can be considered cashback as they are just returning money you spend, whereas the £1 reward for logging in might ordinarily be considered an annual payment, but it is treated as a discount on the monthly account fee. So no part of the reward represents income.
  • If you opt to donate your co-op rewards to charity, is it still counted against you, somehow? Or does it go straight to them directly so you are never 'associated' with it?
  • masonic
    masonic Posts: 22,845
    Photogenic Name Dropper First Post First Anniversary
    Forumite
    If you opt to donate your co-op rewards to charity, is it still counted against you, somehow? Or does it go straight to them directly so you are never 'associated' with it?
    If they donate it to charity on your instruction, then you are not treated as receiving it.
Meet your Ambassadors

Categories

  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.8K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.7K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards