Bank account transfer incentive - Taxable ?

[ladymuck]

Thanks. Can that be done in Free Agent do you know ?

Yes there should be a facility to create new entries in your chart of accounts. The system help will be able to tell you how

[northernladuk]

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.

But the £100 isn't income. It's irrelvant for the books as it's not a cash figure. 4k is cold hard cash on the books. I think you are way over thinking this.

[SuperLooper]

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.

But then you'd have £100 more left in your bank account (than if the discount were not offered), so your year-end profit would be £100 higher, so you would pay CT on it.

[radish2008]

Both good points. Accountant said it is logged as Other Income > Grant Income in FA if anyone else stumbles across this in the future.

[northernladuk]

Both good points. Accountant said it is logged as Other Income > Grant Income in FA if anyone else stumbles across this in the future.

Who says 'Ask your accountant' isn't good advice

[Lance]

Both good points. Accountant said it is logged as Other Income > Grant Income in FA if anyone else stumbles across this in the future.

Surely that's dependant on the accountant?
I mean it's not grant income, but your accountant has simply identified it a useful place to put it.
My accountant might say put as interest received with a note.
It's treated the same and taxed as profit.

[ladymuck]

Surely that's dependant on the accountant?
I mean it's not grant income, but your accountant has simply identified it a useful place to put it.
My accountant might say put as interest received with a note.
It's treated the same and taxed as profit.

I suppose Grant Income, much like my suggestion of creating a new account, really flags it up so the accountant is prompted to ask about it if year end is a good while away.

Interest Income is also very valid but there is a chance the transaction note may be missed.

[adubya]

Both good points. Accountant said it is logged as Other Income > Grant Income in FA if anyone else stumbles across this in the future.

OK, so your accountant has deemed it taxable then. Seems correct, although an odd category for it.

[eek]

OK, so your accountant has deemed it taxable then. Seems correct, although an odd category for it.

Why wouldn't it be taxable?

[radish2008]

Why wouldn't it be taxable?

Some people (google account opening incentives and you'll find the posts) argue that it isn't income and not subject to tax (see previous posts about incentives). There is no clear guidance from HMRC so it's down to personal preference.