Hi,

I was trying to work on the correct way to deal with a potential sale of Avios points and I guess there is no better place than this to ask if anyone has solved the same problem. I appreciate that a request for an opinion on something that would cost a reasonable amount from an accountant is a little cheeky - but I guess there may be many others in a similar position to me who have the same question and we could help share the knowledge? Thanks in advance.

I am a director and shareholder in a company. I earn points mostly via my BA Amex, Tesco points and personal flights. I also earn a small amount of miles on company travel. I earn a fair number of miles on company expenses reimbursed to me that were original charged to my BA Amex card.

I think for tax purposes the points are mine and are not taxable (in the UK 2012). HMRC guidance note here : http://www.hmrc.gov.uk/manuals/eimanual/EIM21618.htm

When I travel on business I would prefer to use my air miles and book in a premium cabin (I book in premium cabins for my personal travel). The other directors (and shareholders) in the company agree that the company would agree to buy these tickets at a fair price. I can offer a fair price because the tickets are flexible in terms of cancellation charges vs a ticket purchased directly from BA. A non flexible BA ticket would give a good indication of the price I would sell at and save the company the difference between that and a semi flexible fare.

If I sell the tickets to the company I presume I will have to pay income tax on the income? Should the company pay ENI? or would it be a capital gain?

The company would presumable ask for corporation tax relief on the purchase costs. Would that be allowable?

Avios T&Cs do not allow the sale of points or reward flights - would that apply in this case, is this relevant for the taxation discussions?

Thanks again
S.