The Nationwide Building Society has paid what is described as a ‘fairer share‘ of £100 each to around three million of its customers.
To qualify for this payment the customer must have held a qualifying current account plus either a savings account (including ISAs) with a balance of at least £100 or a mortgage with the building society owing at least £100 as at 31.3.23.
Nationwide has described this pay-out as a profit distribution to members but it is not treated as a dividend for tax purposes as it is not paid in respect of shares held. It is in fact normal bank interest, with no tax deducted at source and must be included on tax returns accordingly.
In most cases this extra income will be covered by the taxpayer’s personal savings allowance of £1,000 for basic rate taxpayers or £500 for higher rate payers. Additional rate payers and those with interest income in excess of the personal savings allowance will have a tax liability as a result of receiving the £100.
When advising us of your income ahead of us completing your self assessment tax return please ensure that you tell us if you have received this £100 windfall.