Nationwide Fairer Share Joint Acc Interest & Tax Query

emgus53

Morning all - a query about the Nationwide Fairer Share payments. My partner and I have a joint Nationwide current account, and then I have a separate current account with them too, she doesn’t have any other Nationwide current accounts. We’ve both had the fairer share payments land today, mine in my separate current account but my partners in our joint account.
As per the T&Cs, ‘The payment is taxable savings income. This means that it is treated in the same way as any interest you may earn on your savings account or current account. We are not required to deduct any tax from the payment, but we will report it to HM Revenue & Customs (HMRC)’.
I’m therefore trying to figure out how HMRC will receive notification of the payment to the joint account and the potential impact it will have on both of our reported savings interest income for this year - is it as simple as it will be bundled in with any other interest earned on the account this year and then split 50/50 between us, or does anyone know if this will be treated any differently, especially given that I’ve received my fairer share payment elsewhere where it will be treated as 100% mine for saving interest & PSA calculations?
Nationwide customer services have been a bit useless with this query and have said they don’t report interest to HMRC despite the T&Cs suggesting otherwise, and have just pointed me in the direction of HMRC savings interest and PSA guidance, hence posting here. Given the ‘…treated in the same way as any interest you may earn…’ then I’m presuming it will be split 50/50 but wanted to see if anyone had any ideas otherwise 

Admittedly it’s a nice problem to have, but as ISA interest rates are high enough at the moment to make it worthwhile spending a bit of time adjusting non-tax free savings interest forecasts to not exceed both of our PSAs this year (along with avoiding annoying tax code changes in 2yrs time that might affect other things) and having already adjusted the forecasts once after the fairer share payment was announced a few months ago I want to make sure I get it right if having to adjust again now! TIA. 

kaMelo

I would assume it will simply be reported as interest, that is how Nationwide view it anyway, and as a joint account it would be shared 50/50.

That's my interpretation at least.

TheBanker

kaMelo said:

I would assume it will simply be reported as interest, that is how Nationwide view it anyway, and as a joint account it would be shared 50/50.

That's my interpretation at least.

My interpretation is different - I interpret the 'bonus' as having been earned by the member, not the account. So it should be reported as £100 for each member, not £150/£50. 

If I had a savings account in my name, and opted to have the interest paid to a joint current account, it would still be 100% my interest. I don't see this 'bonus' as any different.

But what really matters is how Nationwide are going to report it to HMRC. They might not have worked that out yet, but they are the only ones who can answer the question. It might be best to send the question in writing - more chance of it getting passed to someone who can answer. 

DE_612183

I agree with @TheBanker - the payment is made to the member not the account - the account is only the vehicle to get the money to the member.

kaMelo

You both may well be correct, I just don't think there is an option when reporting interest to be that granular on a joint account, hence why I think differently.

I can tell you exactly how it worked in about twelve months time as I'm in exactly the same position as the OP.

TheBanker

kaMelo said:

You both may well be correct, I just don't think there is an option when reporting interest to be that granular on a joint account, hence why I think differently.

I can tell you exactly how it worked in about twelve months time as I'm in exactly the same position as the OP.

They might report the interest against the membership number rather than an account number.

emgus53

Thanks all, some very interesting thoughts. I have posed the query to them via email and will update this thread when they have responded.

DJ_Mike

Old thread I realise, but did you ever get a reply? I'm interested in the exact same question. 

WillPS

TheBanker said:

kaMelo said:

I would assume it will simply be reported as interest, that is how Nationwide view it anyway, and as a joint account it would be shared 50/50.

That's my interpretation at least.

My interpretation is different - I interpret the 'bonus' as having been earned by the member, not the account. So it should be reported as £100 for each member, not £150/£50. 

If I had a savings account in my name, and opted to have the interest paid to a joint current account, it would still be 100% my interest. I don't see this 'bonus' as any different.

But what really matters is how Nationwide are going to report it to HMRC. They might not have worked that out yet, but they are the only ones who can answer the question. It might be best to send the question in writing - more chance of it getting passed to someone who can answer. 

I agree, and I think Nationwide are trying to make this distinction clearer by depositing the payment in a sole current account wherever possible, even if the eligibility criteria were only met in a joint current account.

DJ_Mike

For what it's worth, my own fairer share payment last year appeared in the savings certificate / total interest on the (solo) account it was paid into. (Very easy to spot, because the interest on that account is a pittance otherwise.) 

If that's the basis they report to HMRC on, then a payment to a joint account will be treated as 50/50 in HMRC's eyes even if it was meant to be for the benefit of one person.

It would be simpler if Nationwide would just pay both payments to our joint account (or let us nominate the account). 

FIREDreamer

DJ_Mike said:

For what it's worth, my own fairer share payment last year appeared in the savings certificate / total interest on the (solo) account it was paid into. (Very easy to spot, because the interest on that account is a pittance otherwise.) 

If that's the basis they report to HMRC on, then a payment to a joint account will be treated as 50/50 in HMRC's eyes even if it was meant to be for the benefit of one person.

It would be simpler if Nationwide would just pay both payments to our joint account (or let us nominate the account). 

This year’s payment arrived this morning. 😀