use of cashback credit card when self employed?

pavlovs_dog

hello all, i have a question to ask on behalf of a friend.

friend has been self employed for around 2 years and does his own tax returns. i was telling him about the wonders of cash back credit cards today, and recommended he get one. he asked me how it would affect him tax wise, a question i couldnt answer. im hoping you can help :beer:

if he uses this card for his business expenses, does he have to declare the 'cash back' (be it cash, points etc) he receives?

if so, how is it noted on the form; would it classify as unearned income?

how (if at all) would it affect the tax he pays/can claim back?

finally, does the nature of the cashback affect the way it is treated for tax purposes? (ie if he were to get nectar points/airmiles/tesco clubcard points instead of cash for example)

many thanks for any wisdom you can share - i must admit im totally put of my depth on this one

p_d

pavlovs_dog

many thanks jimmo

johnllew

jimmo wrote: »

If he uses his club card vouchers to buy something special so that he gets 4 or 5 times their face value then that increased value will constitute business income.

Where is your authority for this? Surely the assessable amount will be the market value of the vouchers? ClubCard Deals are notoriously overvalued and can usually be obtained for a fraction of their deemed value.

johnllew

I believe Gold Coast Selection Trust Limited v Humphrey, 30TC209 is the authority for using market value in such instances.

pavlovs_dog

thanks you both, i shall pass the info on