HMRC and Cashback

time2save

Hi,

I don't know if this issue has been covered deeply on the forum or by MSE themselves, but according to many newspapers etc http://www.telegraph.co.uk/finance/personalfinance/investing/9953193/HMRC-to-tax-fund-cashback-from-next-week.html, HMRC is to taxing cashback, if it doesn't do so currently.

Meaning CC companies will have to take at least the 20% Tax off cash-back payments that you want or tax returns for us, hmm me thinks this might affect the rates offered by Nectar, Quidco & Co..?

Good thoughts about this, from Paulshore too https://forums.moneysavingexpert.com/discussion/comment/58847107#Comment_58847107


time2save

malcolmffc

The article talks about taxing cashback paid on taking out certain investments, which is a different world to cashback CCs.

aleph_0

Seems like Hargreaves Lansdown are just scaremongering to get headlines. HMRC's logic seems reasonable here - this is essentially money coming out of the fund, that might otherwise be taxed as income (if the money didn't reach the consumer via. the commission trail, the fund would be worth more).

Totally different to cashback credit cards, where one receives a rebate of money that one has just spent.

time2save

Hmm I see what you mean with the investments but would it not affect other types of cashback too

At least Basic Rate Taxpayers don't need to cough up in any case