Members earn interest on the shares they own at a level that reflects the performance of BWCE’s projects. The interest is always paid annually and in arrears.
How the interest is calculated
The 31st of March is the financial year end for BWCE. After this point annual accounts are produced and then audited. BWCE’s board will then make a proposal for the level of interest to be paid to members based on the performance of BWCE’s projects in the previous financial year and BWCE’s financial position at the year end.
Audited accounts and the board’s proposal for member interest payments are then presented at BWCE’s Annual General Meeting and voted on by the members. Assuming the relevant resolutions are passed by members, a statement of interest will be sent to each individual member and the payments can be made a short while afterwards.
For the year to 31 March 2016 the rate of interest to members on their shares, for the fifth year running, was 7%. Payments were made slightly later than expected at the end of November 2016. See BWCE members interest payment update for more information
Your Interest Payment and HMRC
BWCE is required to send out share interest payments gross of tax (in other words with no tax deducted) and we are also required to provide to the Inland Revenue the names and addresses of shareholders who received share interest payments greater than £250. The interest should be declared on the tax return relating to the tax year you receive the actual money (NOT for the year in which it was earned by BWCE). Below is a chart showing the relationship between share purchase, accrual of interest, interest payment and when interest is declared to HMRC. So for the tax return you are completing now for the year 15/16 (31 January 2017 is usually last day for filing on-line) you should declare the interest you received last year.
If you are completing a self-assessment tax return (SA100) the gross share interest should be inserted in box 2 Untaxed UK interest. As the interest is paid in the tax year 2016/17 it could be eligible under the new Personal Savings Allowance. Follow this link to the government website for more information