The slow progress of the switching scheme is only the latest problem to have beset the 10-year effort to increase competition in the business banking market, where RBS remains the largest provider. It is still taxable however as ‘miscellaneous payment’. I looked into it and there are various options they give where you receive £1000 of removing to other banks. According to RBS guidance, most of their SME customers that were due to bank with and transfer to Williams & Glyn will be eligible to take part in the Business Banking Switch. This cash is being split between a payment to the business to cover switching costs (£75m) and a "dowry" to the other bank (£275m) that the bank can choose how to use for the benefit of the ex-RBS customer. Business Banking Switch is an incentivised switching scheme. It's the same as offering a customer a loyalty discount on a product. As part of that application, switch a non-RBS account to your new RBS account (using the Current Account Switch Service). Many business owners are still in the dark about the Business Banking Switch Scheme, so let us explain what the new incentive means for SMEs. As we know the UK Government offered financial support during the Credit Crunch, as a result RBS were due to setup a new bank called "Williams & Glyn", to increase customer choice. As part of the disinvestment of NatWest and RBS business customers (following the Government buyout of RBS 10 years ago), incentives are being offered to business customers to stwitch banks away from RBS/NatWest - in the case of small businesses £1000 and larger businesses £25k. Exempt as non trading ! If you meet the criteria, RBS will pay your bonus directly into your bank account by 29 January 2021. The cherry on top is that if you switch from RBS or NatWest to another selected provider, you will receive a further incentive. There was a brief discussion here. ROYAL Bank of Scotland (RBS) will pay you £175 to switch bank accounts to it - and existing customers can the perk too. Click through on Starling Bank’s offer and give consent for us to contact you. HMRC has confirmed that cash awards should not attract VAT". Just received our Switching Incentive under the above scheme, what is view on VAT treatment ? As a result, we made a commitment to help increase competition in UK business banking and decrease our own market share. So where a bank offers a company a cash incentive to switch banks is this subject to Corporation Tax ? Loyalty Commission RBS business customers have been given an extra six months to switch to rival banks under the Incentivised Switching Scheme (ISS). Many thanks. Are you eligible for a business banking switch incentive? Matthew Young, a long standing connection of ours from his RBS days, who is now with Yorkshire Bank came in to see us earlier this week and shared his insights and a great deal of detail about the planned switch. We cannot switch savings accounts or ISAs. Launched in February 2019, it’s been set up to reward eligible NatWest customers who switch their business current accounts to one of the participating banks.. Already a TSB customer looking to start your switch? My logic being that previous bank charges and interest were tax allowable, so the receipt of a sum to compensate for the previous charging / service should be a taxable business receipt in some form. We have seen clients offered £3000 as an incentive. If you are a Royal Bank of Scotland customer, and your business has an annual turnover of less than £25 million, then you may be eligible for incentives to switch your banking to another provider. Furlough claims for annually paid directors, HMRC suspends late filing penalties until 28 Feb. If so, you might be able to switch your account to us under the Business Banking Switch scheme. It is not clear to me how this "Business Banking Switch" receipt should be treated, but I would assume that it is a taxable receipt as it relates to the client's business activities. ‘Business Banking Switch’ across the RBS customer base. Great news – these are also not taxable income so does not have to be in the tax return. Best Bank Accounts: up to 3% cashback to switch or up to 2% interest - MSE We use cookies to make the site easier to use. Switching to a Royal Bank of Scotland Business bank account; ... You are able to switch your Business Current Account or your business banking to another provider while retaining your business loan with us. Joint accounts can be switched, as long as both parties agree to the switch and you are switching to another joint account. If eligible, you could receive incentive payments for switching your banking to Handelsbanken. Martin Lewis reveals how to compare and switch to the best bank accounts that can save you £100s a year. It might not be taxed because it is a Government backed incentive to move customers out of RBS. Pay in at least £1,500 by 30 December 2020. Doing that there seems to be limited chance that a suitable reason can be found to avoid tax. Business Banking Switch Business Current Account Key Facts Document (including the Business Banking Switch Terms and Conditions, the Statement of Lender and Borrower Responsibilities and Financial ... on the RBS/NatWest Business Current Account(s) you are switching. https://businessbankingswitch.rbs.co.uk/# The payment to me will be about £3000. Royal Bank of Scotland (RBS) has announced today that it is offering new and existing customers £175 to switch their main bank account to the high street bank before 20 April 2020. Can you please advise how to tag this payment and if it would be classed as a form of income therefore taxable? Is this taxable on the business/company? The scheme allows eligible RBS customers to make an incentivised switch from RBS to a participating bank. Which unfortunately it wasn't. My view (currently!) It is taxable. This cash is being split between a payment to the business to cover switching costs (£75m) and a "dowry" to the other bank (£275m) that the bank can choose how to use for the benefit of the ex-RBS customer. As a result, we made a commitment to help increase competition in UK business banking and decrease our own market share. Step 2: You’ll then be directed to the Starling Bank website to complete a registration form (you’ll also be sent an … HP gave me £150 cash back for purchasing a laptop. Following the earlier bail-out of the Royal Bank of Scotland, the Bank is now being forced to get rid of many business customers and is providing payments as an incentive to move to various competitor banks. The Royal Bank of Scotland Group Plc (RBS) has launched an incentivised switching scheme to encourage some of their business customers to switch to another bank. The European Commission agreed measures against RBS to minimise distortions in competition that resulted from the bail-out, mainly to promote greater competition in the SME banking market (for businesses with annual turnover of  £25 million or less). ..... more relevant now we have the Savings Allowance, which presumably doesn't apply ..... Further update: RBS say: "it is the new bank which pays any cash incentive and we have had no communication on whether these payments are taxable". Banks do not have to deduct tax before paying you the cash reward, so you receive these rewards gross and the gross amount is taxable. Needed to be reported as 'other income' to get the strictly correct tax result. It is not possible to use the service to switch a joint account to a sole account. The slow progress of the switching scheme is only the latest problem to have beset the 10-year effort to increase competition in the business banking market, where RBS … This appears to be because Barclays themselves highlighted the tax treatment of their Barclays Blue Rewards current account. It's basically the same as if xxx amount of cash was paid into the account over the counter. ROYAL Bank of Scotland (RBS) will pay you £175 to switch bank accounts to it - and existing customers can the perk too. Drawing a parallel with non-business situations definitely isn't useful. Previously, it meant that business and commercial customers of Royal Bank of Scotland in England & Wales were due to become part of a new bank, Williams & Glyn, but this is no longer going ahead. This includes up to £350 million for an Incentivised Switching Scheme to provide funding to other banks, in order to incentivise RBS’s SME banking customers (particularly Williams & Glyn) to switch their primary business current accounts and borrowing facilities to other banks. Since annual payments are not savings income, these types of reward are not eligible for the PSA (or the 0% starting rate for savings). £4,000 cashback will be paid for switching your Account to us, subject to the terms and conditions below. | £225 million is available as dowries which will be paid to challenger banks to encourage the switch of eligible RBS current account holders with an additional £50 million available for loan related dowries for those eligible customers who move a loan product in addition From today RBS business bank account holders are set to benefit from the £775 million bailout package following the award of funds on Friday to the nine challenger banks. Businesses are being encouraged to switch their Royal Bank of Scotland accounts to an alternative supplier. Pay in at least £1,500 by 30 December 2020. Only for current RBS Business Bank Customers. Is ITTOIA 2005, s 25 (or CTA 2009, s 46 for a company) at all useful to you. Quite a lot! Tax implications for borrowing from family? The Business Banking Switch Scheme was set up by the government following the financial crisis, as part of the bailout of The Royal Bank of Scotland (RBS). Joint accounts can be switched, as long as both parties agree to the switch and you are switching to another joint account. https://businessbankingswitch.rbs.co.uk/about, How to get back control of self assessment, The TaxCalc Survival Guide to Self Assessment, The ultimate guide to starting up in practice. 2. RBS (and I think Natwest) are offering switching bonus to move some customers away from them. The amounts involved are too trivial for anyone to have tested it, I would guess. 08/03/2019. RBS invite business customers to switch banks. The Business Banking Switch scheme is part of RBS' commitment to HM Treasury and the European Commission to encourage competition in the UK small and medium-sized enterprise (SME) business banking market, as a result of the state financial support it … Considering it from an accounting basis and then looking at why it would not be taxable seems the obvious way to look at the problem - now that you've pointed it out! By switching your business bank account, you can often reduce the amount you pay in monthly fees by taking advantage of an introductory period of free business banking. Speak to one of our specialist business banking Partners to start your switch today on 0345 835 3858. The Royal Bank of Scotland Group Plc (RBS) has launched an incentivised switching scheme to encourage some of their business customers to switch to another bank. Presumably more relevant now we have the Savings Allowance, which presumably doesn't apply to APs. Eligible customers must have a turnover of £25m or under (at an individual company level). cash back) for a certain group of customers to move their banking from NatWest or Royal Bank of Scotland to participating competitor banks. Submit your tax return with FreeAgent FreeAgent accounting software can help you meet the Self Assessment deadline on 31st January. The amounts are much higher. Royal Bank of Scotland (RBS) has announced today that it is offering new and existing customers £175 to switch their main bank account to the high street bank before 20 April 2020. Furlough claims for annually paid directors, HMRC suspends late filing penalties until 28 Feb. Subject to conditions, incentive payments are paid in two payments. I'm curious what people think the tax treatment of this would be. The Business Banking Switch also known as the Incentivised Switching Scheme is a scheme which makes available a range of specialist offers (e.g. To receive an offer, customers must complete their switch and close their Royal Bank of Scotland account by 30th June 2021 at the latest. It might sound a bit strange, but it’s a legal requirement that RBS do this to help increase competition in the UK business banking … The RBS have put aside £275m to be paid as incentives when a business transfers to one of the qualifying challenger banks (including Yorkshire Bank, Santander, TSB, Metro, Handelsbanken). The Scottish bank has written to 220,000 of its customers, openly admitting that it is an odd request for any commercial organisation, asking its customers to take business elsewhere. Launched in February 2019, it’s been set up to reward eligible NatWest customers who switch their business current accounts to one of the participating banks.. Given we have about £40 left in the two accounts that would be a decent rate of return. The scheme has been designed to provide offers that are better than those normally available on the market, such as free banking and cash incentives. Hi. Apparently "the scheme is designed to provide you with offers that are better than those normally available on the market". Please be advised that in order to qualify for the incentive payment, your account switch from RBS needs to be complete - meaning both that a business current account has been opened with Metro Bank and your old account with RBS closed. We may require you to open a fee free loan servicing account and will confirm if this is required as part of the switching process. More important ,any idea of amounts they are paying to account holders? I simply offset such rewards against bank charges. As we know the UK Government offered financial support during the Credit Crunch, as a result RBS were due to setup a new bank called "Williams & Glyn", to increase customer choice. The move was announced today by Banking Competition Remedies Limited as it became clear the state-owned Royal Bank was struggling to shift the targeted 120,000 clients from its books by 25 August. I have had my business banking with NatWest for a number of years and noticed that the recent junk mail seemed to be about switching to their competitors. Is it Other/Miscellaneous Income? Bank Rewards e.g. Any other products you have with your old bank will not be moved at the same time. In theory everything is taxable in some way.. No income tax or CGT at all.. the only tax you could get is on the balance related interest if its Net.. but that's standard and not linked directly to the incentive.. This project failed, as a result RBS must now offer Business Bank account customers money to SWITCH AWAY from them. Find out more. Again, provided you meet this criteria, the bonus will be paid directly into your RBS account by 29 January 2021. Find out more. RBS customers will probably know this as the Business Banking Switch Scheme. To check if you’re eligible and what incentive you could receive go to the RBS Business Banking Switch page. As part of the disinvestment of NatWest and RBS business customers (following the Government buyout of RBS 10 years ago), incentives are being offered to business customers to stwitch banks away from RBS/NatWest - in the case of small businesses £1000 and larger businesses £25k. The Business Banking Switch Scheme was set up by the government following the financial crisis, as part of the bailout of The Royal Bank of Scotland (RBS). I have switched business banks from RBS under the switching scheme and have been paid a cash incentive in to my business account. These types of rewards are given for various reasons, for example, paying a certain amount in each month, having a bank account for a period, setting up direct debits, use of online systems, etc. The details are here... https://businessbankingswitch.rbs.co.uk/# The payment to me will be about £3000. Please be advised that in order to qualify for the incentive payment, your account switch from RBS needs to be complete - meaning both that a business current account has been opened with Metro Bank and your old account with RBS closed. Explore our AccountingWEB Live Shows and Episodes, View our 2020 Accounting Excellence Firm Awards Finalists, Covid affects UK Tax residence for mobile workers. Explore our AccountingWEB Live Shows and Episodes, View our 2020 Accounting Excellence Firm Awards Finalists, Covid affects UK Tax residence for mobile workers, Your clients and Business Current Accounts. Bank switching incentives. Royal Bank of Scotland’s (RBS) incentivised switching scheme, also known as the ‘Business Banking Switch’, is for selected business banking customers and launched on 25th February 2019. Are you eligible for a reward for changing your bank? Business Banking Switch scheme (“RBS scheme”). We will then use these funds to repay any outstanding debt with RBS/NatWest. Instead, an incentivised switching scheme – Business Banking Switch – was approved by the European Commission. We will then use these funds to repay any outstanding debt with RBS/NatWest. Bank charges are deducted pre-tax. While the exact details of which banks will be eligible for the funding and how they will apply the funding are yet to be confirmed, we do now know how the money will be allocated to the banks. It’s simple and stress-free, and the full switch option is backed by the Current Account Switch Guarantee. To check if you’re eligible and what incentive you could receive go to the RBS Business Banking Switch page. We have a company with a current account and a deposit account with RBOS, I was actually going to wind up the company, just a few pounds left in its accounts, but if RBOS are going to give us a bung am happy to sit on my hands for a bit to see what develops; but only if the price is right. Inherited property - CGT to pay once divided? Now its more interesting to find a reason not to tax it. Incentive to switch away from RBS/NatWest business banking taxable? For example, cashback payments and switching incentives offered to bank customers to switch current accounts are not taxable. Switch a non-RBS account to your existing RBS account (using the Current Account Switch Service) by 19 November 2020. RBS business customers have been given an extra six months to switch to rival banks under the Incentivised Switching Scheme (ISS). The switching incentive is open to customers who make RBS… Inherited property - CGT to pay once divided? 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