Amex Rewards - UK Tax Implications?
Dec 6, 2011, 5:13 am
#1
Original Poster
Join Date: Jan 2003
Location: Manchester, United Kingdom
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Amex Rewards - UK Tax Implications?
Hi,
I've had an odd phishing type letter from the HMRC, ostensibly framed as a reminder that I need to inform them of any changes in my circumstances. The letter ended with a rather scary "If you have a tax adviser, you should show them this letter". My circumstances haven't changed in years (and they're as simple as simple can be - straight PAYE with the occasional need to fill out a self assessment and no need for a tax adviser), and I don't think they would send such a letter without some kind of trigger.
I can think of only one thing that might seem financially out of the ordinary: I did recently redeem most of my Amex Rewards points against a big, fat PC World gift certificate, which I then used to substantially discount a shiny new MacBook Air......
With this in mind, and bearing in mind I redeemed the points for something of actual monetary value, are there any tax implications I should concern myself with?
I've had an odd phishing type letter from the HMRC, ostensibly framed as a reminder that I need to inform them of any changes in my circumstances. The letter ended with a rather scary "If you have a tax adviser, you should show them this letter". My circumstances haven't changed in years (and they're as simple as simple can be - straight PAYE with the occasional need to fill out a self assessment and no need for a tax adviser), and I don't think they would send such a letter without some kind of trigger.
I can think of only one thing that might seem financially out of the ordinary: I did recently redeem most of my Amex Rewards points against a big, fat PC World gift certificate, which I then used to substantially discount a shiny new MacBook Air......
With this in mind, and bearing in mind I redeemed the points for something of actual monetary value, are there any tax implications I should concern myself with?
Dec 6, 2011, 5:58 am
#2
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Do you earn Membership Rewards points through personal spending or through business spending (either reimbursed by your employer or used to offset business revenue)?
Dec 6, 2011, 6:09 am
#3
Original Poster
Join Date: Jan 2003
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Posts: 8,478
Most of the Amex Rewards points have been earned through business spending that is subsequently reimbursed by my employer.
Dec 9, 2011, 3:35 am
#4
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You may be worrying too much. It looks like a standard letter to me.
Loyalty points are not normally subject to tax in the UK. Probably too much bother. While yours may be significant showing a notional value, HMRC would find it difficult to tax Tesco or Nectar points across the board. I guess points are regarded as a discount.
If you are worried, you could ask HMRC. They claim to have a 'help'line accessed via an 0845 number, but when they are busy, they don't let you wait or leave a message - they just terminate the call! (At least, that was my experience.)
Of course, you would be letting them know, so you would have to declare it if they say it's taxable.
Loyalty points are not normally subject to tax in the UK. Probably too much bother. While yours may be significant showing a notional value, HMRC would find it difficult to tax Tesco or Nectar points across the board. I guess points are regarded as a discount.
If you are worried, you could ask HMRC. They claim to have a 'help'line accessed via an 0845 number, but when they are busy, they don't let you wait or leave a message - they just terminate the call! (At least, that was my experience.)
Of course, you would be letting them know, so you would have to declare it if they say it's taxable.
Dec 9, 2011, 6:58 am
#5
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Agreed, but to the extent that you earn a discount on reimbursed business expenses value has been transferred to you from your employer.
Disclaimer: I am not a UK taxpayer and I have no knowledge of how the Inland Revenue interprets this type of situation. I am merely drawing a distinction between a discount on personal spending and a discount on reimbursed spending.
Disclaimer: I am not a UK taxpayer and I have no knowledge of how the Inland Revenue interprets this type of situation. I am merely drawing a distinction between a discount on personal spending and a discount on reimbursed spending.
Dec 9, 2011, 7:55 am
#6
Join Date: Jul 2010
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From HMRC's internal manual:
"EIM21618 Particular Benefits: Air Miles, Credit Card Points Etc
In general, air miles, petrol tokens, credit card points etc. acquired by an employee are not taxable if they were acquired in the same way as applies to any other member of the general public, for instance by buying goods or services on which such benefits are given,
Provided the vouchers, air miles or points belong to the employee rather than the employer, they are not considered as being provided by reason of their employment even if the goods or services giving rise to them happen to be purchased as part of the employee's business travel or using a credit card provided by the employer.
Using the example of air miles, the benefit of the award of additional air miles will not be considered to be provided by reason of the employment even if the employee concerned only has the opportunity to be awarded those particular air miles because they're going on a business journey for which the costs are met or reimbursed by the employer. But this is subject to the condition that the air miles are awarded to the employee from the outset in just the same way that the provider would award them to any other customer buying the same ticket or product.
In those circumstances, there is no need for the employer - or indeed the third party supplier of the air miles or reward/ profile points - to report these items to HMRC, or for the employee in question to enter them on a tax return if he or she gets one,
However, there is a tax charge on such items, if they are provided by reason of the employee's employment.
This would be the case if the fact of the employment was a necessary antecedent condition to the receipt of air miles. An example of this would be where the employer purchased a block of air miles and distributed them to the employees, perhaps as part of an incentive scheme. Another example would be where there's an arrangement for a third party to provide petrol tokens or some other form of award points specifically to employees of a particular employer but not to other customers.
It is important to remember that the exact tax treatment will depend on the facts of a particular case."
So nothing to worry about.
"EIM21618 Particular Benefits: Air Miles, Credit Card Points Etc
In general, air miles, petrol tokens, credit card points etc. acquired by an employee are not taxable if they were acquired in the same way as applies to any other member of the general public, for instance by buying goods or services on which such benefits are given,
Provided the vouchers, air miles or points belong to the employee rather than the employer, they are not considered as being provided by reason of their employment even if the goods or services giving rise to them happen to be purchased as part of the employee's business travel or using a credit card provided by the employer.
Using the example of air miles, the benefit of the award of additional air miles will not be considered to be provided by reason of the employment even if the employee concerned only has the opportunity to be awarded those particular air miles because they're going on a business journey for which the costs are met or reimbursed by the employer. But this is subject to the condition that the air miles are awarded to the employee from the outset in just the same way that the provider would award them to any other customer buying the same ticket or product.
In those circumstances, there is no need for the employer - or indeed the third party supplier of the air miles or reward/ profile points - to report these items to HMRC, or for the employee in question to enter them on a tax return if he or she gets one,
However, there is a tax charge on such items, if they are provided by reason of the employee's employment.
This would be the case if the fact of the employment was a necessary antecedent condition to the receipt of air miles. An example of this would be where the employer purchased a block of air miles and distributed them to the employees, perhaps as part of an incentive scheme. Another example would be where there's an arrangement for a third party to provide petrol tokens or some other form of award points specifically to employees of a particular employer but not to other customers.
It is important to remember that the exact tax treatment will depend on the facts of a particular case."
So nothing to worry about.
