The good news here is that if you get cash back from your bank depending on how much you spend, then this is not taxable income. There is limited information online at: https://businessbankingswitch.rbs.co.uk/about. Subject to conditions, incentive payments are paid in two payments. The main account affected by the press speculation is the Barclays Blue Rewards current account. Accordingly, a “Business Banking Switch” has been established by RBS in order to comply with this directive and provides a funding package to eligible “challenger banks” in order to incentivise eligible SME banking customers to switch their accounts and loans away from RBS. We will then use these funds to repay any outstanding debt with RBS/NatWest. The ISS is to encourage up to 200,000 RBS and Natwest business banking clients to switch their accounts to the challenger banks to ensure RBS meet the EU competition rules set down following the governments £45billion of RBS in 2008. 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. 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 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 … My recollection is that it is an annual payment. It is still taxable however as ‘miscellaneous payment’. 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. Any other products you have with your old bank will not be moved at the same time. 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. Any ideas where I can start to confirm the tax treatment of these potentially large sums? The Royal Bank of Scotland has recently begun inviting many business customers to switch banks. Business Banking Switch is an incentivised switching scheme. 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. 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! We cannot switch savings accounts or ISAs. I simply offset such rewards against bank charges. Inherited property - CGT to pay once divided? RBS business customers have been given an extra six months to switch to rival banks under the Incentivised Switching Scheme (ISS). https://businessbankingswitch.rbs.co.uk/# The payment to me will be about £3000. 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 … 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. 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.. We have seen clients offered £3000 as an incentive. 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. The Current Account Switch Service is a free service that lets you switch a business current account from one participating bank to another – in 7 business days. This appears to be because Barclays themselves highlighted the tax treatment of their Barclays Blue Rewards current account. 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.. It has been set up to reward eligible Royal Bank of Scotland (RBS) customers who switch their business current accounts to one of the participating banks. Got a letter from RBS this morning actually, the "Business Banking Switch" (away from RBS) is to launch in Feb next year. As a result, we made a commitment to help increase competition in UK business banking and decrease our own market share. I have switched business banks from RBS under the switching scheme and have been paid a cash incentive in to my business account. I'm curious what people think the tax treatment of this would be. 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). However, it does not appear to be compensation, but more an inducement payment. Many thanks. How to get back control of self assessment, The TaxCalc Survival Guide to Self Assessment, The ultimate guide to starting up in practice. Only for current RBS Business Bank Customers. These types of reward are not savings income, so they are not eligible for the PSA (or the 0% starting rate for savings). 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. 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. Businesses are being encouraged to switch their Royal Bank of Scotland accounts to an alternative supplier. Are you eligible for a reward for changing your bank? 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.. 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. 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. It's basically the same as if xxx amount of cash was paid into the account over the counter. Tax implications for borrowing from family? 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. cash back) for a certain group of customers to move their banking from NatWest or Royal Bank of Scotland to participating competitor banks. And it’s completely free as long as you retain your business current account with us. 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. If you are clients of RBS we now have more information in relation to the Business Banking Switch which will go live in late February 2019. 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). 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. ROYAL Bank of Scotland (RBS) will pay you £175 to switch bank accounts to it - and existing customers can the perk too. 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