Cashback and Flat Rate Scheme

[john01269]

Hi,

I have a business paypal credit card that pays 0.5% cashback. Now would this be flat rate vat or would it be outside the scropt of the flat rate vat system as it’s cashback meaning you getting cash back from the purchases you buy using the card rather than income from selling stuff?

I placed it in the Misc Income, but it shows up on the Profit and Loss in the Turnover section. Is this right or wrong. Should it incur flat rate vat or not?

Thanks

[QFBeth]

Hi @john01269,

If you have classed it as income then I would expect it to show in the P&L as you described, as for whether it should incur VAT or not I would advise you to speak with an accountant as they would be able to tell you