UC Self employed - should I put bank account switching incentives as income?

jadex

Re 3) it is an income (Other Income) and because of it you report it as part of your business income.
It kind of sucks as it is a double whammy in comparison to personal account incentive... it is taxable and at the same time it reduces your UC payment...

seatbeltnoob

jadex said:

Re 3) it is an income (Other Income) and because of it you report it as part of your business income.
It kind of sucks as it is a double whammy in comparison to personal account incentive... it is taxable and at the same time it reduces your UC payment...

not a double whammy because taxes are an expense under universal credit. So when you pay the corporation tax on the interest received. That tax is an allowable expense so you get to subtract it from future profits. 

born_again

https://www.pie.tax/tax-pible/how-to-handle-bank-switch-incentives-on-your-self-assessment-tax-return

To report a cash incentive from a bank switch, you need to include the amount in the 'other UK income' section of your self-assessment tax return. This ensures that HMRC is aware of the additional income and can tax it accordingly.

https://www.accountingweb.co.uk/any-answers/hmrcs-response-re-rbsnatwest-switching-incentive

My understanding is that the amounts here were received from each of your clients’ “new” bank after switching their business bank account from Natwest. The facts appear to be that the clients have taken advantage of the RBS Business Banking Switch whereby eligible customers of RBS (including Natwest) were induced to switch their accounts following the agreements made around the RBS government bailout.

 

My reading of the guidance at BIM100210 and within Statement of Practice 4/97 is that this payment do fall within the definition of cashback, and thus the payments are taxable when received by a business conducting a trade.