Taxing the incentives

radoslaff

:question:I'm sure it has been disscussed but I can't find it. Let say I receive £130 from TSB and £150 from HSBC for switching my current accounts. This is not interest so I assume I need to tell the taxman about this money. So far I've never dealt with this kind of !!!!. The same should apply for any cashback too, if I'm not mistaken. Would anybody be so nice to tell me what's there to be done and when? Thanks in advance.:question:

PeacefulWaters

No tax due.

alanq

https://performanceaccountancy.co.uk/tax-bank-rewards/

AirlieBird

Cashback is not taxable as it is regarded as a discount on the payment for the goods or services.

One off switching incentives are also not taxable.

As for bank rewards it is a little complex and depends on how long the rewards last and whether you pay a fee.

Rewards for spending are not taxable for the same reason as cashback.
Rewards for holding the account are taxable if they are paid for more than a year. Tax is deducted at source unless you pay a fee for the account when tax needs to be paid by the account holder.

radoslaff

AirlieBird wrote: »

Rewards for holding the account are taxable if they are paid for more than a year. Tax is deducted at source unless you pay a fee for the account when tax needs to be paid by the account holder.

Club Lloyds has a £3 monthly fee, though it's waived if you deposit £1500 (so I never pay it) a month and it also has a reward (this year I received 6 cinema tickets, last year I got a magazine subscription). So we have a fee and a reward that goes for more than a year. Do I need to tax my cinema tickets? It may sound funny to some people but I need to have a clear mind. Thanks again.