TaxPersonal TaxBrittania Building Society wins £2m tax battle

Brittania Building Society wins £2m tax battle

Brittania wins battle over tax-free accounts, plus HMRC backdates the rule change

Brittania Building Society has successfully challenged the taxman to pay back
tax it took on bonus payments the society paid out to 300,000 members.

The society paid £51m in bonuses to its members with child trust funds and
ISAs, but even though the accounts were tax-free HM Revenue & Customs took
£2m in tax from the recipients.

Brittania called on the taxman to change its rule, and the society revealed
this week that it was successful. HMRC also backdated the change so members paid
out their yearly bonus in February would get money back, the
Daily
Mail
reported.

‘We looked at the scheme and realised that it wasn’t fair for members with
ISAs or CTFs to be paying tax on their bonus, when the accounts were tax free,’
said Brittania group chief executive Neville Richardson in the report. ‘So, we
approached HM Revenue and Customs asked them to amend the law, which they have
agreed to do.’

Further reading:

Read
the Daily Mail’s story

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