hmmm cashback credit card, how to I record the cashback in business books?

w211

Tmesis wrote: »

Why would that be? There is no reason why one should not.

CKhalvashi wrote: »

It's probably against the Ts and Cs.

I do use mine, however, and this hasn't been pulled.

CK

I have an American Express Platinum Charge Card. You are able to apply for a supplementary card for yourself to separate expenditure, and this can be for a business as mentioned in their welcome pack:

"Separating your expenses with a second Platinum Card

You can get a second Platinum Card for yourself, something that's especially useful if you want to split your purchases between business and pleasure"

Even though American Express issue cards for businesses and corporates, they don't seem to mind if you use a personal card for business use.

Tmesis_2

LittleVoice wrote: »

You say "it isn't income" and yet "it's other non-trading income". Which is it?

No, I say air miles etc are not income. I then start a new paragraph and begin it with "regarding the original question" which was about cash back; cash back is non-trading income.

LittleVoice wrote: »

Why should it be any kind of income?

If cash back re purchases on a personal credit card is not income, why should it be for businesses? It's just your own money coming back to you and not taxable. If it is income, then it's taxable.

It is income for both, but it is not taxable for individuals. For a company it is treated as non-trading income. Companies and individuals are subject to different tax regimes.

In any case, if a company treated it as a discount instead of income, it would have the same tax effect as it would reduce their expenses by the same amount, and thus increase their tax liability by the same amount (though there are potential complications around VAT for discounts).