Self-employed - declaring income

the-mango

Sorry, I pressed send before I'd edited the title. This is about income that needs to be declared on self-assessment. Does cashback count as income ? Apologies if this is in the wrong place

Nicola_Ed

Hi


Yes it is - see the HMRC guidance below.


BIM100210 - Miscellaneous income: particular sources: cash-backs

HMRC set out its view of ‘cash-backs’ in Statement of Practice 4/97.
A cash-back received in the course of trading is a receipt of the trade to be included in taxable trade profits.
When a customer, not carrying on a trade or property business, decides to take their business to one concern rather than another, they are not providing that concern with a recognisable service such as to bring them within the scope of the miscellaneous income sweep-up provisions. This applies even if a commission or cash-back which may be received by the customer as consideration for the purchase of goods or services is paid under an enforceable contract separate from the contract for the supply of the goods or services itself.
However, if someone is paid for introducing some other customer to the supplier of goods or services then they are taxable under the miscellaneous income sweep-up provisions if:

• they are not otherwise chargeable; and
• the payment is not gratuitous (see BIM100110).

UserX

Nicola_Ed wrote: »

Hi


Yes it is - see the HMRC guidance below.


BIM100210 - Miscellaneous income: particular sources: cash-backs

HMRC set out its view of ‘cash-backs’ in Statement of Practice 4/97.
A cash-back received in the course of trading is a receipt of the trade to be included in taxable trade profits.
When a customer, not carrying on a trade or property business, decides to take their business to one concern rather than another, they are not providing that concern with a recognisable service such as to bring them within the scope of the miscellaneous income sweep-up provisions. This applies even if a commission or cash-back which may be received by the customer as consideration for the purchase of goods or services is paid under an enforceable contract separate from the contract for the supply of the goods or services itself.
However, if someone is paid for introducing some other customer to the supplier of goods or services then they are taxable under the miscellaneous income sweep-up provisions if:

• they are not otherwise chargeable; and
• the payment is not gratuitous (see BIM100110).

I see they won't be winning any awards for Plain English then. !!!!!! does that all mean?

Davide123

UserX wrote: »

I see they won't be winning any awards for Plain English then. !!!!!! does that all mean?

Not taxable, unless received in course of trade.

Davide123

Nicola_Ed wrote: »

Hi


Yes it is - see the HMRC guidance below.


BIM100210 - Miscellaneous income: particular sources: cash-backs

HMRC set out its view of ‘cash-backs’ in Statement of Practice 4/97.
A cash-back received in the course of trading is a receipt of the trade to be included in taxable trade profits.
When a customer, not carrying on a trade or property business, decides to take their business to one concern rather than another, they are not providing that concern with a recognisable service such as to bring them within the scope of the miscellaneous income sweep-up provisions. This applies even if a commission or cash-back which may be received by the customer as consideration for the purchase of goods or services is paid under an enforceable contract separate from the contract for the supply of the goods or services itself.
However, if someone is paid for introducing some other customer to the supplier of goods or services then they are taxable under the miscellaneous income sweep-up provisions if:

• they are not otherwise chargeable; and
• the payment is not gratuitous (see BIM100110).

The link on the article from hmrc website reads...

BIM100210 - Miscellaneous income: particular sources: cash-backs
https://www.hmrc.gov.uk/manuals/bimmanual/bim100210.htm
Why cash-backs for customers are not taxable under the miscellaneous income provisions.

the-mango

Ok, I think what that might mean is that if you receive cashback for goods bought used for your business you have to have it taxed? But personal goods cashback is not taxed?

My situation is that I receive cash back on my normal shopping ie clothes etc but not on anything to do with my self employment business, so it's not taxed?

Davide123

the-mango wrote: »

Ok, I think what that might mean is that if you receive cashback for goods bought used for your business you have to have it taxed? But personal goods cashback is not taxed?

My situation is that I receive cash back on my normal shopping ie clothes etc but not on anything to do with my self employment business, so it's not taxed?

I agree, that's my understanding.

John_Pierpoint

I have a bank account that pays me interest, gives me cash back &charges me a fee.
Presumably the cash back in not taxed & the fee cannot be off set against the taxable interest.?!

It is not a business bank account!

Davide123

Correct, the interest received is the taxable interest

zygurat789

Davide123 wrote: »

Correct, the interest received is the taxable interest

Unless, of course, the account is a tax exempt one.

Davide123

zygurat789 wrote: »

Unless, of course, the account is a tax exempt one.

Of course

But the chap says taxable