Why is Halifax Paying their Current Account Reward Net?

Written by Karen Bryan

Halifax logoI was surprised to see that the monthly reward on my Halifax Reward Current Account is still being paying net of income tax i.e. after deduction of 20% basic rate income tax.

With the new £1,000 personal savings allowance for basic rate taxpayers having kicked in, surely the Halifax reward payment should be paid gross (with no income tax deducted)?

I assume that Halifax’s decision is based on semantics in that they pay a reward versus interest.

It’s down to interpretation. The first quarterly profit (as Sharia compliant banks share profit versus paying interest) paid on my Al Rayan 24 Month Fixed Term Account was paid gross.