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Bank account transfer incentive - Taxable ?

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    Bank account transfer incentive - Taxable ?

    Nat West offered to pay me £4k to transfer my business bank account to another bank and the money has just landed.

    The question is does this count as income.

    I had assumed so but then Googled and found a few links that said no, on the basis it's an incentive and you wouldn't declare cashback as taxable income (i.e. cashback on a business credit card for example)

    Any ideas ?

    #2
    Originally posted by radish2008 View Post
    Nat West offered to pay me £4k to transfer my business bank account to another bank and the money has just landed.

    The question is does this count as income.

    I had assumed so but then Googled and found a few links that said no, on the basis it's an incentive and you wouldn't declare cashback as taxable income (i.e. cashback on a business credit card for example)

    Any ideas ?
    it's not income as it's not yours.
    Its your company's. It's revenue but not VATable.
    See You Next Tuesday

    Comment


      #3
      Re-write your question with a very clear distinction between the director of the company, paying the company and you as an individual who is completely separate to the company and see if it makes any more sense to you.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by Lance View Post
        it's not income as it's not yours.
        Its your company's. It's revenue but not VATable.
        I'm not convinced it's revenue and even taxable. A bit more research reveals this:

        You don't declare them they are not taxed.

        The payment is an incentive. It's the same as offering a customer a loyalty discount on a product. HP gave me £150 cash back for purchasing a laptop. That's not taxed either.

        Opening a bank account is the same as purchasing a product. It's a service instead of a product. You also don't declare cash back from Quidco and Topcashback even if you didn't buy anything or use a service to get the cash back.
        HMRC doesn't also seem to have a position. Although a gift or award from a 3rd party, like winning a prize from a supplier would attract income tax.

        Comment


          #5
          Originally posted by northernladuk View Post
          Re-write your question with a very clear distinction between the director of the company, paying the company and you as an individual who is completely separate to the company and see if it makes any more sense to you.
          I get what you're saying. I never thought of it as my personal income but I'm still struggling to see it was business income or profit when it's related to the purchase of a discounted service by the business.

          I'm not bothered about paying the tax if it's due but think it falls into a grey area.

          Comment


            #6
            I had a similar question recently about how to account for cashback from company cards. It's not a vastly different concept.

            As it's high value, I would create a new income account in the interest earned region and clearly label it bank switch incentive (or whatever) and see what my accountant does with it.
            Last edited by ladymuck; 15 January 2021, 11:59. Reason: Double checked the value of the incentive

            Comment


              #7
              Originally posted by radish2008 View Post
              I get what you're saying. I never thought of it as my personal income but I'm still struggling to see it was business income or profit when it's related to the purchase of a discounted service by the business.

              I'm not bothered about paying the tax if it's due but think it falls into a grey area.
              It's a grey area if it's personal banking.
              It's not at all grey as it's company money.
              If you put company money on a football match and win the winnings are profit and therefiore subject to corporation tax.

              STOP USING PERSONAL TAXATION RULES ON COMPANY MONEY
              See You Next Tuesday

              Comment


                #8
                Originally posted by ladymuck View Post
                I had a similar question recently about how to account for cashback from company cards. It's not a vastly different concept.

                As it's high value, I would create a new income account in the interest earned region and clearly label it bank switch incentive (or whatever) and see what my accountant does with it.
                Thanks. Can that be done in Free Agent do you know ?

                Comment


                  #9
                  Originally posted by radish2008 View Post
                  I get what you're saying. I never thought of it as my personal income but I'm still struggling to see it was business income or profit when it's related to the purchase of a discounted service by the business.

                  I'm not bothered about paying the tax if it's due but think it falls into a grey area.
                  So where do you think interest on the business bank account falls?

                  Surely all income to the company is counted when calculating profit. Are you saying this 4k isn't counted as profit at the end of the year?
                  Last edited by northernladuk; 15 January 2021, 12:58.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

                  Comment


                    #10
                    Originally posted by northernladuk View Post
                    So where do you think interest on the business bank account falls?

                    Surely all income to the company is counted when calculating profit. Are you saying this 4k isn't counted as profit at the end of the year?
                    I'm not saying anything at all hence the question, there's no challenge here just a discussion. I'd assumed it would be treated as income until I got a few opinions saying otherwise. With credit interest it's paid on a service you have already bought whereas this could be described as a discount on something you are yet to buy. Like a discount of £100 on a laptop I that should have cost £1k. I wouldn't count that as a profit of £100 and pay CT on it.

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