Most people have a collection of loyalty cards and use them to pay for holidays, treats or even everyday things. There was a big outcry when Tesco changed their club card rules recently and they had to backtrack.

Quite a few people I know use Amex cards for business because of the generous rewards that they can use personally (and tax-free).

Recently, I’ve come across some providers that have taken this principle and turbo-charged it, with really interesting results for all business owners and especially higher-rate taxpayers.

When I was introduced to B2B Tradecard several months ago, I was sceptical at first but it was recommended by someone I trust and I decided to try it out.

Here’s how it works:

  • You register on the website and get sent a card
  • You pay a fee to be listed in an online business directory, typically £500-1,000 per month
  • You get reward points to the value of 80% of the listing fee
  • You transfer the points to the card
  • You use the card anywhere that takes Mastercard


And the benefits for you:

  • Your fee is a tax deductible expense, so you reduce your Corporation Tax bill by 19%
  • The rewards are not considered taxable income so you can reduce your dividends by the amount of the rewards (e.g. a higher rate taxpayer would save over £3,000 in tax each year based on a fee of £1,000 per month)
  • Lower taxable income might also help you stay below one of the many income thresholds at which life becomes more difficult (reduction of child benefit form £50k, loss of personal allowance from £100k, etc.). Note: it might also reduce your income for mortgage purposes.
  • When you use your card, you may also get additional rewards. For example, M&S will give you reward points equal to 4% of your spend, with Yo Sushi it’s 9%.


Run your own reward scheme:

This is maybe the best part. You can share the joy with your favourite customers and win their loyalty. Give them rewards!

You could use rewards to attract new customers, or to encourage existing customers to take a new product or service. It’s not as cheesy as discounting your prices and you can set the rewards at the same level of commission as you would pay to an introducer or sales agent.

Or just to say thanks to a valued customer.

However you use it, a rewards scheme will increase customer loyalty, generate new business and be a win for everyone.

What are the tax implications?

Rewards are tax-free under current legislation and this is confirmed in HMRC’s Employment Income Manual. This has been the position for many years and we are not aware of any effort by HMRC to change this. While the law could be changed, we will advise you if this happens and make appropriate recommendations at that time.

To find out more about the B2B Tradecard, just get in touch or if you can’t wait, sign up here.



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