Switching incentives- taxable?

cancunia

For me, the concern was really about if / where declaration on the Tax Return. I too cannot see any references about people actually paying tax on these incentives. I'm assuming that they are 'cashback' and will not be declaring them unless I see something to change my mind.

Archi_Bald

The switching incentives are a one-off cashback (/discount) on a service called the provision of a current account. You don't have to pay tax on it any more than you have to pay tax on the cashback (/discount) you might get on an insurance policy, or the cashback (/discount) on any goods you buy.

If you see it differently, you could add the cashback to your taxable income when doing your tax return or self assessment. I don't think the HMRC would decline taking a bit of extra tax from you.

redux

If anyone argues, tell them you are counting it as negative goodwill. This is an accounting concept related to acquiring an asset at less than its value.

This is one basis amongst others for George Osborne's family's business paying no corporation tax for 7 or 8 years.

jimjames

Interestingly Nationwide seems to think they could be taxable and should be declared


http://www.nationwide.co.uk/products/current-accounts/our-current-accounts/recommend-a-friend-tab#xtab:are-there-any-tax-implications-for-me-or-my-friends


"Any payments received by the existing customer “referring” a friend or relative could be liable to income tax and should be declared as income to HM Revenue & Customs. If you need help with this, please contact HMRC, whose contact details are on their website at hmrc.gov.uk."

cancunia

jimjames wrote: »

Interestingly Nationwide seems to think they could be taxable and should be declared


http://www.nationwide.co.uk/products/current-accounts/our-current-accounts/recommend-a-friend-tab#xtab:are-there-any-tax-implications-for-me-or-my-friends


"Any payments received by the existing customer “referring” a friend or relative could be liable to income tax and should be declared as income to HM Revenue & Customs. If you need help with this, please contact HMRC, whose contact details are on their website at hmrc.gov.uk."

I came across that too when I was looking into the subject of tax on cash incentives. They key words are 'existing customer' as this relates to income from a referral.
I'm with the treatment as 'cashback' concept and will not be declaring my switching incentive, any more than I will be declaring Topcashback or Quidco payments.
I expect the day will come when HMRC decide that Cashback is taxable, but afaik it's not the case now or in 2014/15.