Readers’ forum: Switching payment

My clients are a husband and wife and they own two commercial and two residential properties. Several years ago they opted to tax one of the commercial properties. The couple switched their current account from Bank of Scotland to Santander under the business banking switch scheme and received a switching incentive payment in April 2019 and a cashback payment related to turnover in March 2020. Both of these receipts were expected as part of the scheme.

I believe that the incentive payment may be outside the scope of VAT or possibly exempt and that the cashback is probably exempt.

The clients then received a further switching incentive payment in May 2020. The latter was unexpected and apparently resulted from changes that had been made to the scheme. I believe this payment to be outside the scope of VAT but would appreciate readers’...