H.O.L Test case appeal. Judgement Declared. ***See Announcements***

[locutus]

The thread title says :-

 

http://www.consumeractiongroup.co.uk/forum/oft-test-case-updates/139905-h-o-l-test-135.html#post2555585

[pompeyfaith]

They cant tax it surely as it was in most instances money earned before the bank took it and was there by already subject to income tax ?

 

PF

[InformedSearcher]

They cant tax it surely as it was in most instances money earned before the bank took it and was there by already subject to income tax ?

 

PF

 

 

That's a 'no' but I bet they wish they could!!

Michael

[HSBCrusher]

mmmm.

 

refunds might not be subject to tax...

 

interest might well be though.

[hacksaw]

I wonder if business customers will declare their refunds to the HMRC, as they almost certainly offset their bank charges against their profits when they were incurred

[Mr lex]

Hummm,

 

Bank charges and Profits, do they belong in the same sentence ??

[Bigmac versus]

mmmm.

 

refunds might not be subject to tax...

 

interest might well be though.

 

fair point, it will be paid in euros at this rate.

[hacksaw]

What I mean is bank charges on business accounts that are claimed as business expenses reduce taxable profits. Therefore if a business customer gets those bank charges back, they have to pay tax on it.

[tallulah59]

:-xWhy oh why is this not front page news? Banks have been getting away with literally stealing people's money for decades, they are nothing more than common criminals like our expenses grabbing MP's. It's all very well pontificating about 'never exceeding your overdraft' if you manage your money well or have enough to not worry about it, but being charged £35 for being 10p in the red is criminal and should have been outlawed years ago (yes, it does happen, and usually only the poorest pay). Although it is frustrating being charged if there has been a genuine mistake or if you are on a low income, penalties should be proportionate to the amount and the 'admin' costs and they charge clearly do not reflect this. I cannot understand why so little publicity is being given to the bank charges debate.....oh, hang on a minute, doesn't money talk to politicians and the media...silly me!

[car2403]

Old news is not good news - this is old news, now.

 

Until the Judgment, that is.

[Sol]

:-xWhy oh why is this not front page news? Banks have been getting away with literally stealing people's money for decades, they are nothing more than common criminals like our expenses grabbing MP's. It's all very well pontificating about 'never exceeding your overdraft' if you manage your money well or have enough to not worry about it, but being charged £35 for being 10p in the red is criminal and should have been outlawed years ago (yes, it does happen, and usually only the poorest pay). Although it is frustrating being charged if there has been a genuine mistake or if you are on a low income, penalties should be proportionate to the amount and the 'admin' costs and they charge clearly do not reflect this. I cannot understand why so little publicity is being given to the bank charges debate.....oh, hang on a minute, doesn't money talk to politicians and the media...silly me!

 

As Car said, this was in the media a lot when people were able to claim thousands from the banks. Now that it is in court and cases are on hold there is nothing new for the media to report until the outcome. MPs' expenses will die down soon as well.

[tifo]

mmmm.

 

refunds might not be subject to tax...

 

interest might well be though.

 

The IR view is that charges refunds are not 'new' income as they've been taken from 'DISPOSABLE' income you have had AFTER tax was paid. It's like money being taken from the wage you receive after NI and tax.

 

The interest you receive IS income and as such has to be declared. Depending which department of the IR require this info, received interest below £300 does not need to be declared.

[InformedSearcher]

LOL I knew I should never have mentioned tax in the 1st place!

A serious note though is that the banks will be able to claim back tax as this to them will be expenditure, a very unusual venture for them. With good financial advice [sic] they'll find ways to minimalise outgoings.

 

This is a time when I think back to C&E going on strike and leaving honesty boxes for Excise duty. People were exceptionally honest and at one location they collected - 1p!!

 

As for the media I have to say they never seemed to report much when the case even started. I would have expected mass reflection and comment by everyone.

 

Michael

[tifo]

LOL I knew I should never have mentioned tax in the 1st place!

 

It's got to be mentioned. Some people still need the info.

[pompeyfaith]

Indeed tax is not my thing all i know is i got paid and the employer took care of my tax obligations.

 

But on a more serious note perhaps we should have more coverage of the tax subject on this forum if anything it will show the many financial companies etc out there that this site does strive to act within the laws of this country and is not here to help folk avoid debt.

[srfrench]

If your claim is in the legal system and you've claimed compound interest then the whole monetary award regardless of interest and capital is NOT subject to taxation.

[InformedSearcher]

If your claim is in the legal system and you've claimed compound interest then the whole monetary award regardless of interest and capital is NOT subject to taxation.

 

That would be correct ... for non-business accounts. This would also be so for people who have their claims with the financial institution only. Any financial institution paying 'interest' might deduct any basic rate tax at source - the only potentially 'grey' area.

Michael

[hsbcfiddled]

If your claim is in the legal system and you've claimed compound interest then the whole monetary award regardless of interest and capital is NOT subject to taxation.

 

What if the settlement was made without going to court or the bank accepting/acknowledging a claim and was purely a 'business decision'?

[srfrench]

that depends if there is interest added.

 

Basically the charges (when refunded) will not have a tax levied against it, but any interest that the bank adds to it as a way of "saying sorry" will be taxed. However you would need to declare it and chances are it won't be much at all so I wouldn'y bother anyway!

[srfrench]

And to answer the question (sorry)....then no, if they made a "refund" as a business decision then nothing gets taxed.

[tifo]

chances are it won't be much at all so I wouldn'y bother anyway!

 

People with 2 or 3 claims settled claims in any tax year may easily receive a few thousand pounds in interest, depending what rate they're paid at (and many banks do pay the contractual rate), so this kind of amount DOES need to be declared and cannot be ignored.

[danielr]

subbed

[yourbank]

subbed

Must have been a bad game. Let's hope your picked for the next game.

[noomill060]

A trifle harsh, your bank.

 

Lets hope danielr recognises your sparkling wit/attempt at jolly banter and sticks around.

 

Welcome to the thread danielr

[yourbank]

A trifle harsh, your bank.

 

Lets hope danielr recognises your sparkling wit/attempt at jolly banter and sticks around.

 

Welcome to the thread danielr

Oh well, have used the line before but for the unfortunate poster you can click on "thread Tools" and it should have a dropdown box and in that it will say "subscribe to this thread" and hey presto, job done.