Posts Tagged ‘nectar’
Everyone knows the insurance industry is the worst kind of old boys club. Well, perhaps not the worst kind. Still, the fact that financial advisers can be sunning themselves on a cruise paid for on the back of advice given 20 years ago is why the whole financial services regime is currently undergoing a ‘reform’ to make it more transparent for everyone involved, with such ‘trail commission’ payments expected to be banned from 2014.
Now, HMRC have decided to get in on the act, with a new ruling that any such commissions that are thrown back to consumers will, from April onwards, be taxable. Earlier years’ bonuses will not be taxed. The insurance industry are perturbed by this new announcement, but are trying to spread the bad news by insinuating they are merely the first step on an HMRC cashback rampage.
The payments in question are basically repeat commission paid annually on longer term insurance-type investments. If you purchased the product with the help of a financial adviser, you can rest assured that he has been enjoying the benefit of the annual charge-back ever since you took it out. However, if you did not have an adviser, or in certain other circumstances, the investment product provider or broker will get the bung instead. Such firms are under no obligation to show you a penny of this free commission, but some do, notably Hargreaves Lansdowne who repay 16% of any commission received to its investors as a ‘bonus’. It is this cash payment returned to customers, either by way of an account credit or set off against management fees that HMRC have now ruled as chargeable. As far as they are concerned, it is an income generated by your investment, so unless it’s in a tax-free wrapper like a Stocks ISA or a SIPP, it’s fair game.
Hargreaves Lansdown, who is the largest bonus re-bunger, is understandably unimpressed. “It seems the Government is now seeking to tax small savers and investors. This is effectively a second tax on their income,” grumbled chief executive Ian Gorham.
However, he didn’t stop there, complaining to the Telegraph that it wasn’t just sour grapes, he was merely concerned that “the government may have set a precedent in taxing such loyalty schemes and savvy shoppers could well be next with Multi-buys, cashback credit cards and cashback websites all possible targets in the future.”
So should we all be worried about our clubcard balances? Is the taxman going to be making honey out of your Nectar card? Should you start declaring your Quidco and TopCashback earnings on your tax return? Apparently not. HMRC are reported to have dismissed these claims as “complete rubbish”, and the taxing of additional income on an investment product (i.e. designed to make the holder money) does seem to be entirely different from earning 20p from buying a kettle at Argos.
Still, you can never say never with HMRC, and perhaps the good folks at Hargreaves Lansdown have just given them a great idea for next year’s Budget…
“You say it best when you say nothing at all” trilled Ronan Keating back in 1999. He’s dead now (or so we imagine) but we sincerely wish that Nectar and easyJet had heeded his dying words before they went ahead with this desperately shitty piece of ‘promotion”.
You see, you can use your Nectar points to book flights with easyJet now, and by way of conveying that message, a couple of stooges dressed as flight attendants got on board a London tube train and arsed about for a bit. Admittedly, a handful of the passengers do look vaguely amused but there’s an overriding air of pity and sympathy being wafted in the direction of the daft dancing sods from almost everyone present.
So now, Nectar and easyJet, now, everyone hates you and no one wants to book any flights to anywhere with anything that has got anything to do with either of you. We’re all hiding in cupboards under staircases, waiting for the anger to subside.
If you’re too posh for Clubcard points because your middle-class pretensions demand you shop with a Nectar card, then good news. There’s a new iPhone app that offers users exclusive deals across all retailers that offer Nectar points. It’s very basic, and we’re not too sure why you have to tell the app you want an offer before purchasing it – presumably that’s for data-capture and targetting rather than providing more meaningful functionality to the user. There’s also a Sainsbury app offering similar features.
According to the promotional video, all you have to do now is bother with a full shop and a car hire every day, and you’ll be enjoying that economy flight to Luton Airport in no time. And we’re always suspicious of a woman who buys a man’s Gilette razor – it usually means the circus is in town.