Gifts from banks for opening accounts

labp04

Hi, pretty sure this will have been asked before - but I can’t find it! In short, do cash or other gifts from banks (eg M&S gift card) offered on signing up need to be declared on tax return and, if they do, where? Thanks in advance

uknick

They don't have to be declared.

xylophone

https://www.litrg.org.uk/tax-guides/other-tax-issues/savings-and-tax

My bank account pays ‘rewards’ – does the PSA apply to them?

The PSA applies only to savings income as defined by law. This means that even if you receive income that you think of as savings income, if it is not within the definition, it is not eligible for the PSA. Equally, it is not eligible for the 0% starting rate of savings.

The situation can be very confusing in relation to certain types of ‘reward’ accounts which many banks offer. If you receive any interest (whether on the reward account or on a different account), you should now receive that gross and it will be eligible for the PSA. The treatment of ‘rewards’ however depends on the nature of the reward. It is very possible that you will receive the reward net of 20% tax; in addition, the reward may not be eligible for the PSA. There is often limited guidance available from the bank, and the nature of the reward can vary from account to account.

Please note that we are talking about regular cash rewards here as opposed to cash incentives for people switching their accounts or cashback on certain types of spend, which are not taxable as they are considered a 'discount' rather than a reward.