I received £75 cashback in my limited company’s business bank account as a reward for opening the account. Do I record this as miscellaneous income? Is this income taxable?
usually cashback is not taxable, as far as I know it is more like a discount. So, you may could post it to bank charges or so as a discount received. But it is always worth to double check with your accountant. I am not an accountant.
But this is an incentive for opening the account, rather than cashback on spend. I had similar and when I asked in an accounting forum, they agreed that it was Other income and is taxable.
Even if it was cashback on spend, this would either be an income source or it would offset expenses; either way it increases your profit and therefore increases the amount of tax you would have to pay. AFAIK, there is no tax exemption for cashback, whether from suppliers or a third party such as a bank/credit card company.
Having researched on the internet, it seems you are correct. However, I’ll confirm with an accountant.
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