Whittards 'Tea investment'

hc25036

Interesting mail/survey from Whittards suggests they are considering a novel investment. Probably still a long way off, but the proposal may be invest £1000 for 3 years and get £100 of free tea a year plus a discount on every purchase (10%?). After 3 years you get the £1000 back.

Given that we only drink tea and spend £2-400 a year with Whittards it sounds a good deal. Obviously the risk is them going out of business and losing the £1000, but what about the tax situation? Would tax be payable on the free tea and discounts?

SnowMan

Would it depend on whether it was ISAd (iced) tea whether it was taxable?

Ark_Welder

I will confess that I haven't read through all of this, only a quick shuftie. You may want to do so in more detail, but accompanied by either something a bit stronger, or a bit more chocolatey.

http://www.hm-treasury.gov.uk/d/income_tax_rules_on_interest.pdf

The Whittards proposal does sound like a type of corporate bond, but not one to be confused with a retail bond. Distributions from those would usually be made gross and taxed as interest.

hc25036

SnowMan wrote: »

Would it depend on whether it was ISAd (iced) tea whether it was taxable?

Groan (but only because I didn't think of it first....)

hc25036

He a quick scan and rapidly lost the will to live! I'd expect to pay tax on the £100 free tea but the shop discount would be tough to track.

Might keep an eye out for this to start just for fun.

SnowMan wrote: »

Would it depend on whether it was ISAd (iced) tea whether it was taxable?

Ark_Welder wrote: »

I will confess that I haven't read through all of this, only a quick shuftie. You may want to do so in more detail, but accompanied by either something a bit stronger, or a bit more chocolatey.

http://www.hm-treasury.gov.uk/d/income_tax_rules_on_interest.pdf

The Whittards proposal does sound like a type of corporate bond, but not one to be confused with a retail bond. Distributions from those would usually be made gross and taxed as interest.

SnowMan

Would it depend on whether it was ISAd (iced) tea whether it was taxable?

hc25036 wrote: »

Groan

The cold jokes are always the best :snow_laug

grizzly1911

That's snow joke.

Don't Hotel Chocolate do something similar?

coastline

one of the [pg] tips in the weekend papers...;)

gozomark

what happens if Whittards goes bust (100% loss ?), and what probability do you put on it ?

sharpe106

Would guess if it goes bust you would have to be in the que to get money money back, doubt any administrator would put you at the top of the list. Plus would the £100 of tea be your choice or theres. Also it would be £100 at full value, whittards is generally expensive unless they have a sale on.

Ark_Welder

Unsecured creditor, most likely. So right towards the end of the queue when comes to getting anything back in the event of insolvency.

Forgot to say earlier, but very unlikely that the bond could be traded - unlike normal retail bonds - so your capital would likely be tied up for the duration too.