Bussiness expenses on a personal CC

JSave

Hi

I have a bog standard MBNA CC with about an 9k limit. In a normal month I can easily spend the whole limit on business expenses (it is basically doing all our online purchases so this is not as much as it seems for one person).

My Questions for the MSE forum users is

Should I be using a card with cash back, air miles etc...

Would this be dubious and or taxable, seeing that I am earning extra money for transactions that are really the companies not mine.

I would not like to have any transactions cost the company any more than they are now but it seems prudent to get any freebees that the card companies might offer for a high volume card.

Many thanks in advance

opinions4u

Should I be using a card with cash back, air miles etc...

Yes.

Would this be dubious and or taxable

Potentially taxable, but it's a grey area. You could ring the tax office - I suspect for modest amounts they'd prefer to ignore it. Larger amounts they'll suggest you declare.

Don't forget sites like www.topcashback.co.uk to increase your additional income a little further.

lisyloo

You need to look at all the available options.
It also worth looking at airline and hotel schemes.

My DH used to do a lot of travel and he had a holiday inn priority points cards.
You can also get extra points for opening their credit card which I did twice.
It's normally 25,000 points for a hotel night and we got the Crowne Plaza on Times Sqaure in New York which is quite expensive.

We have also been upgraded twice on holiday flights flights because of him having cards.
If ever they are full in economy then they will look for business travellers to give the upgrades to.

Paul_Herring

opinions4u wrote: »

Potentially taxable, but it's a grey area. You could ring the tax office - I suspect for modest amounts they'd prefer to ignore it. Larger amounts they'll suggest you declare.

http://www.moneysavingexpert.com/cards/cashback-credit-cards#better

Cashback credit cards are a form of reward scheme, yet rather than giving points or bonuses, you get cold hard cash, tax-free, every time you spend on the card.

I believe the cashback is viewed as a discount, not as income.

chattychappy

A few years ago I was in a similar position. I used AMEX Plat Chargecard - as at the time they had the best reward scheme, but of course these things are changing every five minutes.

I specifically checked the issue of tax liability with my accountant. He was clear that there was no liability and nothing to declare in respect of airmiles etc. It always surprised me and I suppose it might have changed since or he might have been wrong. He generally went to the "play it safe" school so I trusted him.

Not sure what the justification is when pretty much any other benefit you obtain as a result of employment is taxable. If you fly business or first class and have a great time, then the HMRC don't care - provided the trip is just for business purposes. Same as if you buy the nicest must luxuriant leather chair to sit in - provided it's in your office, you're OK. I saw these examples in their handbook. I think the point they were trying to make is you are taxed on your income from your job rather than on the pleasures you receive from it. Perhaps that's the thinking - if the airmiles flow from a trip (or expenditure) that is exclusively for business purposes then it's tax free - just as the champagne that flows in First Class is tax free...

CannyJock

JSave wrote: »

Would this be dubious and or taxable, seeing that I am earning extra money for transactions that are really the companies not mine.

In the circumstances you describe, I'd say it would be taxable. You're using business expenditure to create a personal benefit.

http://www.hmrc.gov.uk/manuals/nimmanual/NIM02108.htm

chattychappy

CannyJock wrote: »

In the circumstances you describe, I'd say it would be taxable. You're using business expenditure to create a personal benefit.

http://www.hmrc.gov.uk/manuals/nimmanual/NIM02108.htm

Nah... that's to do with retail staff being paid a bonus directly by banks when help collect stolen cards. It only concerns NI (and confirms it's not payable anyway).

Did you mean to quote something else?

(Incidentally I agree with you if the purpose of the business expenditure is to create a personal benefit.)

CannyJock

Nope, meant to include that one. Was the principle of the cash being treated as income rather than a discount that I was trying to point out - HMRC website is as search-friendly as ever so this was the nearest I could find without trawling for ages