# Cashback and rewards tax UK explained

> Budgeting & saving money · Last updated 4 July 2026

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## Quick answer

Bank cashback, loyalty points and credit card rewards on personal spending are generally not taxable — HMRC treats them as discounts, but business rewards need proper records.

App-linked cashback has grown rapidly in UK retail, but business use has different rules for corporation tax and VAT. This guide clarifies HMRC treatment for personal spending and what records business users need to keep.

## Key facts

- Personal bank switching cashback typically not taxable income — marketing incentive classification
- Credit card points and air miles from personal spend generally exempt — same as rewards tax rules
- Selling points or systematic manufactured spending for profit may create taxable trade income
- Business accounts — cashback may reduce allowable expenses or count as miscellaneous income

## Bank switching

Bank switching bonuses of £100 to £200 are common and typically not taxable for individuals on personal accounts. You only need to declare if the account is used predominantly for business.

Multiple switches are legal if you meet each bank's terms. Occasional personal switching bonuses are not treated as taxable income by HMRC.

## Retail loyalty

Nectar, Tesco Clubcard and similar points are worth pence rather than pounds when redeemed. HMRC treats personal grocery loyalty points as a price discount, not income.

Employee reward schemes through work are taxed differently via PAYE. These are not the same as personal credit card or loyalty points on your own spending.

## Referral bonuses

Occasional friend referral bonuses are usually not taxable for individuals. Repeated referral income at scale may be viewed by HMRC as trading income rather than a personal discount.

Crypto exchange referral bonuses paid in cash are likely taxable. They fall under a different regime from traditional bank switching cashback.

## Frequently asked questions

### Do I declare bank switch bonuses?

Not usually for personal accounts. Business-related incentives may need reporting on Self Assessment if they relate to your trade.

### Are Tesco Clubcard points taxable?

No for personal grocery shopping. HMRC treats them as a discount on the price of goods rather than taxable income.

### What about cashback apps?

Personal shopping cashback through apps like TopCashback is generally not taxable. Business purchases need proper expense records regardless of any cashback received.

## Primary source

https://www.gov.uk/government/publications/income-tax-rewards-from-credit-cards

## Related

- [Credit card rewards tax](https://moneyguide.org.uk/credit/credit-card-rewards-tax/)
- [Premium bank accounts worth it](https://moneyguide.org.uk/banking/premium-bank-accounts-worth-it/)

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Money Guide is not a financial adviser and does not currently earn commission on credit cards. This guide is educational information only — always check the issuer's own terms, eligibility checkers and fees before applying. 18+, subject to status. Credit is a commitment: only borrow what you can repay in full each month, because interest charges erase every reward on this page.