How to Account for Cash Incentive Payment For Switching Banks

Accounting
1

Hi

I have switched business banks from RBS under the switching scheme and have been paid a cash incentive in to my business account.

Can you please advise how to tag this payment and if it would be classed as a form of income therefore taxable?

2

I presume I select Something else not on the list
What Post to Nominal would I select?

3

Wouldn’t it be a negative “Bank Charge”?

4

HMRC has commented that many incentives offered by banks and other account providers are not taxable. For example, cashback payments and switching incentives offered to bank customers to switch current accounts are not taxable.

If your Ltd post it to directors loan account. If self employed post it to drawings.

5

I don’t see how it would not be taxable if it is a business bank account. Are you a sole trader or limited company? It would cone under the sweep-up provisions for miscellaneous income - here is the link to the section on cash backs https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim100210

I would tag it to miscellaneous income. It is not personal income as it relates to the business bank account not a personal account so shouldn’t go against director’s loan or drawings.

6

I must have read a really old article that’s all I can say

7

As an individual it wouldn’t be taxable income - it’s the fact that it’s a business that means it is.

8

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