Readers' forum : Points and possibilities

24 January 2017

Issue: 4584 / Categories: Forum & Feedback

The tax treatment of redeemable points received by a sole trader from business suppliers.

My client is a sole trader. His business consists of advising private householders on garden landscaping and then carrying out the work. One of his materials suppliers has instituted a scheme whereby points are allocated based on purchases.

The points are valid for one year and each quarter he receives an update showing the number. For the first (and so far only) time he used the points to purchase materials which he used outside the business for his own garden.

At first sight the tax treatment seems clear by reference to HMRC’s Business Income Manual at BIM100210 because this seems akin to a cashback which was ‘received in the course of trading is a receipt of the trade...’. Reference is made to statement of practice 4/97 however and here there seems to be mixed messages.

Paragraph 14 is relevant and this also refers to paragraph 6. The...

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