Martin Lewis has issued a warning to Nationwide Building Society members who hold joint accounts, alerting them that they may face a tax bill on the recent £100 Fairer Share payment. The consumer champion clarified on his BBC podcast that the payment is classified as interest for tax purposes, unlike bank switching bonuses or credit card cashback.
Tax Implications of the Fairer Share Payment
The Fairer Share scheme has now run four times, with the latest £100 payments reaching eligible members between June 10 and 30. To qualify, customers needed a current account combined with a savings account or mortgage, plus specific account activity. Nationwide has confirmed most payments have been processed.
A listener asked Martin Lewis about a joint account he holds with his wife, questioning how the payment would be treated for tax. Lewis explained: "The Nationwide Fairer Share payment is an £100 payment this year and in previous years. Effectively, it's a loyalty bonus for existing Nationwide customers who fulfil certain criteria. What is interesting about this particular payment is it does count as interest."
Who Is Liable?
Lewis clarified that the tax liability depends on the individual's personal savings allowance. Basic rate taxpayers have a £1,000 annual allowance, while higher rate taxpayers have £500. Additional rate taxpayers have no allowance. He said: "For those people who earn above their personal savings allowance... you would have to pay tax on the £100. If you earn less, you won't have to pay tax on the £100 or if you're a non taxpayer, you won't have to pay tax on the £100."
For joint accounts, the payment is split 50/50. Lewis stated: "Like if you have joint savings, the interest payment is demarked 50/50, the Nationwide Fairer Share in a joint bank account is demarked 50/50... So yes, you should consider this to be £50 each. Simple as that."
Nationwide's Clarification
Nationwide was asked how the payment is treated for joint accounts where only one party is eligible. The building society said: "The £100 payment belongs to the eligible member, however, in the case of a joint account where only one of the parties was eligible, HMRC may assume the interest is split between parties. The customer may need to contact HMRC for this to be changed if it impacts their tax position."
Potential Tax Bills
Tax on the £50 share is based on marginal income tax rates. A basic rate taxpayer would owe £10, a higher rate taxpayer £20, and an additional rate taxpayer £22.50. Lewis advised affected members to review their savings allowance and contact HMRC if necessary.
