• Send us a message

    Fill in our form and we'll get back to you as soon as possible

    Please enter name
    Please enter your telephone number
    Please enter your email address
    Please let us know which of offices would most convenient for you?
    Please enter the details of your enquiry
    Please enter the verification code
    Send us a message
  • Services for you
  • Services for business

Loyalty Bonuses Taxable, Rules Upper Tribunal

Investors using the popular online financial investment platform Hargreaves Lansdown (HL) may not have heard that the 'loyalty bonuses' they receive from HL have been deemed by the Upper Tribunal (UT) to be taxable income in the hands of the recipients and therefore subject to withholding tax for Income Tax purposes.

HL argued that the bonuses were rebates of management charges, but HM Revenue and Customs were successful in persuading the First-tier Tribunal that they represent a continuing source of income.

HL appealed that decision to the UT and lost.

The practical effect for many investors will be the need to remember to enter the total of the loyalty bonus and tax withheld on their tax return each year. However, for higher-rate taxpayers, a further tax charge will arise.

It is likely that this decision will be further appealed.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.