declaring interest on self assessment

Mistermeaner · 15 April 2019 at 12:01PM

hi, first time doing self asessment

all seems pretty straight forward

only question is when declaring interest on savings....

I have a joint account at santander and a personal account at barclays

barclays pays me £7/month (blue rewards), after I pay a £3 fee (i don't get it either)

santander (joint) pays about £6/month interest (on average) but then a further ~£10/month in cash back

Do I declare just half the santander interest (on basis of it being joint account) or do I declare the cash back and blue rewards stuff as well?

uknick · 15 April 2019 at 5:28PM

On the joint account you only declare half the interest received. You don't deduct the monthly fee.

The cashback is not declared at all.

The Blue Rewards are declared as they're considered interest paid gross of income tax, so you enter £7 x how months you received it for. You can't claim the fee as an expense.

You should get, or can ask for, a tax certificate from each bank telling you what "interest" has been paid. This is normally available about June/July after the tax year ends.

polymaff · 15 April 2019 at 6:24PM

uknick wrote: »

The Blue Rewards are declared as they're considered interest paid gross of income tax, so you enter £7 x how months you received it for.

The £7 Loyalty Reward received up to and including November 2016 for being part of Barclays Blue Rewards is subject to UK income tax and may need to be declared to H M Revenue & Customs.

All other current rewards and cashback earned through Blue Rewards, and any Loyalty Reward received from December 2016, are not subject to UK income tax.

https://www.barclays.co.uk/help/accounts/added-features/tax-blue-rewards/

So since 12/2016, no you don't.

Mistermeaner · 15 April 2019 at 7:11PM

How strange ! Free money

I wonder if it’s possible to get 500 current accounts with Barclays

polymaff · 15 April 2019 at 7:53PM

Mistermeaner wrote: »

How strange ! Free money.

If it has taken you 5 years to work out that that is the grail of MSE Essential Money, well ....

uknick · 16 April 2019 at 10:02AM

polymaff wrote: »

The £7 Loyalty Reward received up to and including November 2016 for being part of Barclays Blue Rewards is subject to UK income tax and may need to be declared to H M Revenue & Customs.

All other current rewards and cashback earned through Blue Rewards, and any Loyalty Reward received from December 2016, are not subject to UK income tax.

https://www.barclays.co.uk/help/accounts/added-features/tax-blue-rewards/

So since 12/2016, no you don't.

Thanks for that. I'll tell my other half as she's been declaring it because she says that's what the annual statement from Barclays tells her to do.

polymaff · 16 April 2019 at 12:40PM

Pushed Barclays over this, and they eventually fudged it by declaring it was £3.50 cashback per DD.

Haven't had any success with Halifax, or the Co-op - yet.

[Deleted User] · 2 May 2019 at 12:38AM

I was also very confused about this because it said it was taxable, and doesn't count as interest (and therefore not part of the Personal Savings Allowance). But i wanted to ask the following:

Let's say I am a self employed high tax payer (40%). So for the barclays blue reward, I earn £7 loyalty per month. However, as a higher tax payer, I pay 40% of that as income tax (-£2.80), +2% as higher tax payer N.I. contributions (-£0.14), +9% as student loan repayment (-£0.63), and then at the end, I have to pay a non-deductible £3 as this is the account fee for to have the account.
Because it that is the case, then that means I pay out £6.57; which means I am actually gaining £0.43 only every month. and not gaining £4 (£7-£3) every month.
Is this correct?

Also, I was wondering, it says cashback is not taxable, and the Santander 123 says they have the 123 Cashback for household bills, then does that mean this amount is not taxable? I contacted Santander and they weren't very clear, and just told me I I will need to ask HMRC or accountant. However, I have come to realise that the HMRC don't give clear or consistency advice on the phone calls at all, and my accountant says everything is taxable. So it is as clear as mud right now to me.

I would appreciate clarification on the above. Many thanks.

polymaff · 2 May 2019 at 9:17AM

Since December 2016 the Barclays Blue Loyality Reward is not taxable.

https://www.barclays.co.uk/help/accounts/added-features/tax-blue-rewards/

Cashback from Barclays and Santander is not taxable

https://www.gov.uk/government/publications/statement-of-practice-4-1997/statement-of-practice-4-1997

7. In general, ordinary retail customers purchasing goods, investments or services at arm’s length will not be liable to Income or Capital Gains Tax in respect of any commission, discounts or cashbacks received by them. For example, an ordinary retail customer who, when purchasing a car, negotiates to receive part of the commission earned on the sale by the salesperson will not be liable to Income or Capital Gains Tax in respect of that commission.

uknick · 2 May 2019 at 10:13AM

GP0717 wrote: »

I was also very confused about this because it said it was taxable, and doesn't count as interest (and therefore not part of the Personal Savings Allowance). But i wanted to ask the following:

Let's say I am a self employed high tax payer (40%). So for the barclays blue reward, I earn £7 loyalty per month. However, as a higher tax payer, I pay 40% of that as income tax (-£2.80), +2% as higher tax payer N.I. contributions (-£0.14), +9% as student loan repayment (-£0.63), and then at the end, I have to pay a non-deductible £3 as this is the account fee for to have the account.
Because it that is the case, then that means I pay out £6.57; which means I am actually gaining £0.43 only every month. and not gaining £4 (£7-£3) every month.
Is this correct?

Also, I was wondering, it says cashback is not taxable, and the Santander 123 says they have the 123 Cashback for household bills, then does that mean this amount is not taxable? I contacted Santander and they weren't very clear, and just told me I I will need to ask HMRC or accountant. However, I have come to realise that the HMRC don't give clear or consistency advice on the phone calls at all, and my accountant says everything is taxable. So it is as clear as mud right now to me.

I would appreciate clarification on the above. Many thanks.

If your accountant says that, I'd get another. What other duff advice are they giving you?

[Deleted User] · 2 May 2019 at 11:41PM

Santander replied with clarification 'As outlined in our previous message I can confirm that we do not deduct tax from your interest payments. I would also advise that the cash back is not taxable as it is not an interest payment.' so looks like for my 123 Santander account, the only thing I need to declare on is interest on the balance then.

Yes, I do have some doubts about my accountant and his advice, but accounts obviously protect themselves and not the client. So perhaps its better if he says everything is taxable so I don't accidently miss paying tax...

But yes, does anyone know if my calculation for the barclays blue reward is correct or not? because if I am only earning £0.57 per month instead of £7, is there any point in keeping the account?
Appreciate some advice on this

declaring interest on self assessment

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