Halifax and Bank of Scotland taking tax from interest
ajo
Posts: 132 Forumite
I am just in the process of reviewing all my accounts with rewards etc. (this may take some time as I have been meaning to do it for a while) anyway. I have noticed on my statements that Halifax have taken tax from the gross, reducing the net.
The previous payment this didn't happen and this is all still under £1000 interest.
Is this correct, has anything changed?
Thanks
The previous payment this didn't happen and this is all still under £1000 interest.
Is this correct, has anything changed?
Thanks
0
Comments
-
I am just in the process of reviewing all my accounts with rewards etc. (this may take some time as I have been meaning to do it for a while) anyway. I have noticed on my statements that Halifax have taken tax from the gross, reducing the net.
The previous payment this didn't happen and this is all still under £1000 interest.
Is this correct, has anything changed?
Thanks
They won't be taking tax from interest.
They'll be taking tax from reward payments as these are 'other income' (not interest).0 -
So the percentage quoted is not "interest" but a "reward"?
Edit: Bank of Scotland reduced its Vantage interest rate from 2% to 1.5% from 1 July, would that explain a lower interest payment?0 -
I am just in the process of reviewing all my accounts with rewards etc. (this may take some time as I have been meaning to do it for a while) anyway. I have noticed on my statements that Halifax have taken tax from the gross, reducing the net.
The previous payment this didn't happen and this is all still under £1000 interest.
Is this correct, has anything changed?
Thanks
You mention accounts with 'rewards' - rewards are not interest.0 -
Halifax Rewards are not interest they are classified as "Annual Payments" under the tax rules, which means they get treated the way interest used to be: basic rate tax deducted at source, paid over to HMRC, and a tax certificate issued to the recipient after the end of the tax year.
This is due to the (idiotic)* way that Halifax have structured their reward scheme.
More info on the tax side at:
https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim8010
PochiSoldi
* Idiotic, because Barclays fixed this issue nearly a year ago by simply rewording their reward scheme T&Cs. All Halifax have to do is to copy the Barclays structure, and simply drop the obligation to stay in credit in order to get the reward.0 -
pochisoldi wrote: »Idiotic, because Barclays fixed this issue nearly a year ago by simply rewording their reward scheme T&Cs. All Halifax have to do is to copy the Barclays structure, and simply drop the obligation to stay in credit in order to get the reward.0
-
It won't matter in a couple of years anyway because they will have reduced it out of existence.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards