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Switching Bonus Tax Treatment
jackqu7
Posts: 5 Forumite
I was wondering if tax applies to switching bonuses paid when opening new bank accounts.
Is a £100 bonus actually £125 with 20% taken off (making higher rate payers liable for a further 20%), or is it not taxed at source, making it liable at 20/40%, or is it actually tax free and not considered a form of income?
Not really losing sleep over this either way but thought it was an interesting question!
Is a £100 bonus actually £125 with 20% taken off (making higher rate payers liable for a further 20%), or is it not taxed at source, making it liable at 20/40%, or is it actually tax free and not considered a form of income?
Not really losing sleep over this either way but thought it was an interesting question!
0
Comments
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No. Tax applies to earnings and interest, not a £100 switching incentive.
(And to pre-empt the possible follow up question that may occur, no you can't claim the £2/month fee for Santander 123 account as tax relief on the interest you gain).0
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