Stand and Deliver

As taxpayers know, when it comes to tax nothing is ever as simple as it first may appear.

This lesson was learned by savers who earn cash bonuses from their bank accounts. In a simple view of the world these payments would surely be counted as interest, and therefore eligible for the £1,000 tax-free allowance.

Would they not?

Ermmm..no, sadly not.

HMRC contends that bonuses from bank accounts are ineligible for the £1,000 tax-free allowance, because the rewards are classed as 'annual payments' (not interest) and are as such fully taxable.

What the state gives with the one hand, it takes with the other!

Here endeth today's lesson.

Tax does have to be taxing.

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