Fair Britannia returns money to members

Britannia Building Society is returning an additional £2 million to its members, following a "fairness" challenge to HM Revenue & Customs.

Neville Richardson, Britannia's Chief Executive, explained: "Each year Britannia's Membership Reward returns a share of the Society's profits to members, to thank them for their loyalty.

"The law governing loyalty bonuses paid to building society members meant that members with ISAs and CTFs were being taxed on their loyalty bonuses - even though their accounts were tax free. We didn't think this was fair. HM Revenue & Customs agreed and changed the law."

The amendment means that Britannia will now be able to pay its loyalty bonuses earned on ISAs and CTFs, gross of tax. It also allows the Society to pay the bonuses directly in to tax-free accounts, without affecting their subscriptions.

In February, 900,000 members shared a whopping £51million. Britannia is now returning a further £2million to the 313,000 members who were taxed on their loyalty payments. In the 11 years the Britannia Membership Reward (BMR) has been operating, more than £471million has been returned to members

Members earn more reward for the more products they have and the longer they've been members of the Society. Individual payments are calculated using a "points" system with members being awarded points depending on which Britannia products they hold. Each point is worth 23p.