Cashback Price Comparison Services Discussion

teri_3

Hi all

I just started on this site today and have posted once already so you might see my name elsewhere.

I came to this site because I had heard about Martin's service from a colleague after I had transferred energy supplier to a small company and did not receive a cash-back although it turns out I got a much better price because I used a comnparison without a cashback.

But here's my question, which does not appear to have been asked before.

Who pays the tax due on the cashback being offered, I hate to put my IR hat on but someone must pay and it is not clear.

I cannot find any of these services registered so either they have forgotton to declare this - in which case they will have an enormous tax liability or each person who received a cashback will have to declare it when the companies report who they gave money to.

Cashbacks like this are quite tricky because it's not like when you buy something and you receive a cashback. In these cases the net amount you pay applies, but as you are not purchasing from the comparison service then the cashback becomes your income - therefore there is a tax and NI issue.

So does anyone know the answer to this - perhaps the services offering cashback/Martin could reply?

The worst part I did not come here to put a dampener on this aspect but it looks as if somewhere a massive tax liability exists, which might be better addressed sooner rather than later.

COS

When your talking £10 to
£30 cash back can't see why this is a concern with regards to tax as that don't effect you.

PS. welcome aboard

teri_3

Thanks for the welcome - what a way to start!!!

I was looking through the website and its definitely a winner in my mind.

Agreed, individually it's no big deal, most offices would just ignore these amounts but the problem might be for the companies. At say even just £10 if one of these companies has say transferred 10,000 people then the liability could be around £57,000 when they go to prepare their accounts as this money has to be declared as salaries, or they decide to say that they gave it away to these particular people and in which case because of the overall liability it would be looked at quite seriously. It would probably default as a liability back to the company concerned.

Do you know if the customer signs anything when they receive these payments?

If they don't maybe the individual should be given a statement with each payment to say that any tax liability would be borne by the company concerned.

COS

Please tell why you are so concerned . Are you setting up shop?

teri_3

Hi COS

No, I wouldn't know where to start.

I am an accountant and was looking at this from a simple cautionary viewpoint.

COS

Thankyou for explaination

Sorry I can't help you futher but hey, look at the bright side, you have now made 4 postings - on your way to being a surpreme moneysaver

Karen_Darby

In accordance with The Income and Corporation Taxes Act 1988 s 349, a company has to deduct tax from payments made in the following circumstances:
1 From any annuity or other annual payment
2. From any royalty or other sum paid in respect of the user of a patent
3. Where any yearly interest of money chargeable to tax under Case III of Schedule D
One-off cash back payments made by price comparison companies do not come within any of the above categories of payments, so no tax needs to be deducted.  If there were regular payments over a few years then this may change although it is unlikely.
Equally, there is no tax liability from the individual as it is not income derived from doing work or making an investment.

As an accountant I'm surprised you didn't just check this for yourself.

Moderator comment:- Post edited to remove an advertisement. We do not allow advertising on our site.

Smartasss

I wonder if she's an Accountant?

Or maybe an accountant?

COS

In accordance with The Income and Corporation Taxes Act 1988 s 349, a company has to deduct tax from payments made in the following circumstances:
1 From any annuity or other annual payment
2. From any royalty or other sum paid in respect of the user of a patent
3. Where any yearly interest of money chargeable to tax under Case III of Schedule D
One-off cash back payments made by price comparison companies do not come within any of the above categories of payments, so no tax needs to be deducted.  If there were regular payments over a few years then this may change although it is unlikely.
Equally, there is no tax liability from the individual as it is not income derived from doing work or making an investment.

As an accountant I’m surprised you didn’t just check this for yourself, however perhaps you would like to check out our current £50 cash back offer - simply call 0800 056 2910 for details.

Once again this dreadful company is allowed to advertise ie: cash back bribe, why?

Please remember this company can cost you money as well as save you some. It should come with a warning just like Share buying.

CabShiraz

First post. Has anyone had any problem getting the £10 cashback from Energyhelpline. Switched gas & elec. to Scot Pwr in April using the Energyhelpline cashback site but no cashback. Phoned, promised to phone back but didn't. Sent two emails but no response??? >:(