Tax advice

[IainSingapore]

Hi

I know everyone should get independent tax advice however can anyone shed any light on any tax advice they have been given in respect of the 1% cash back ? Ie corporate tax and VAT implications.

I wanted to understand this a bit better before incurring fees to get advice. Many thanks

[JDB]

IainSingapore wrote:

Hi

I know everyone should get independent tax advice however can anyone shed any light on any tax advice they have been given in respect of the 1% cash back ? Ie corporate tax and VAT implications.

I wanted to understand this a bit better before incurring fees to get advice. Many thanks

VAT Notice 700/7 at section 10.4 should help. It is a relatively straightforward point, but as you say, you should get your own advice if you are at all uncertain. In principle, the cashback is like receiving interest and the VAT position of the purchase transactions should not be affected.

[Jonathans]

What about redeeming as a statement credit, is that treated the same as cash back or like points?

[The Savage Squirrel]

Jonathans wrote:

What about redeeming as a statement credit, is that treated the same as cash back or like points?

Cash. Or more accurately, statement credit changes the costs and therefore the profit/loss same as any other discount or rebate from a supplier.

[memesweeper]

The Savage Squirrel wrote:

Jonathans wrote:

What about redeeming as a statement credit, is that treated the same as cash back or like points?

Cash. Or more accurately, statement credit changes the costs and therefore the profit/loss same as any other discount or rebate from a supplier.

When I held this card the accountant had me treat it as positive bank charge/interest. This keeps the VAT simple and ensures the right corporation, etc, tax is paid via the minuscule impact this has on profitability.