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Payback and tax implications

Started by: judith
On: 16/12/2011 | 16:54
Replies: 65
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by: llyamah
on: 16/12/2011 | 17:44

@adsb wrote:

@judith wrote:

I am not a personal tax advisor but the basics are that any income should be disclosed on your tax return.

We mention it in our terms and conditions for Payback that it is up to you to work out the tax implications - please see T's and C's: just copy/pasting this clause here for your reference: 
7.1.5. If you receive Paybacks in excess of 100% of the amount you have topped up in the period leading up to and including your Payback Date, there may be personal tax implications for you, which you will be required to take responsibility for.


What is written in section 7.1.5 sounds very dubious to me (but IANAL).

 

Giffgaff payback is somebody sending you money in recognition for a service which you have rendered to them.  That sounds like income to me.  If you were a plumber, and customers gave you money for sorting out their pipes, then that would be income - how is Giffgaff payment different ?

 

Now, section 7.1.5 is saying that if you receive some money from GG, but it's less than you spent with GG, then that's not needed to be declared as income for tax purposes...

So, supposing I work on the tills for Tesco for 10 hours a week at £10/hour.  So I earn £100 per week, before tax.  But, the Giffgaff section 7.1.5 appears to be saying, if I spend £110 a week on shopping in Tesco, then I don't have to pay any tax on the £100 a week I receive.  That doesn't sound right.

 

[ I'm not a lawyer, or a tax adviser, or anything like that.  Do not take this as legal or tax advise, consult a professional. ]

 


I think you might be right.  Although should it be any different if you receive the payback in the form of credit?  Any accountants on the forum that could clear all of this up?!

 

I wonder how many people declare their payback anyhow?

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Message 11 of 66
by: navi51
on: 16/12/2011 | 17:49
There is nothing logical about tax or the law so that you can be charged mega bucks for having it dealt with.
To giff is better than to gaff

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Message 12 of 66
by: adsb
on: 16/12/2011 | 17:49

@llyamah wrote:

 

I wonder how many people declare their payback anyhow?


I'd be prepared to bet that everybody who's ever had a run-in with the taxman will declare it.  If HMRC find any undeclared income they come after you for detailed records for the past 6 years (IIRC) looking for more undeclared income.  It's a heck of a lot easier to not try to hide income from them.

Message 13 of 66
by: llyamah
on: 16/12/2011 | 17:53

But how likely is it that HMRC do find out about the payback?  I imagine it is more likely if the payback is transferred from a paypal account to a bank account.

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Message 14 of 66
by: adsb
on: 16/12/2011 | 17:57

@llyamah wrote:

But how likely is it that HMRC do find out about the payback?  I imagine it is more likely if the payback is transferred from a paypal account to a bank account.


 Giffgaff are a company.  Companies have to file annual accounts....

 

"What's this 'payback to members' figure then ?"

 

Message 15 of 66
by: llyamah
on: 16/12/2011 | 18:02

@adsb wrote:

@llyamah wrote:

But how likely is it that HMRC do find out about the payback?  I imagine it is more likely if the payback is transferred from a paypal account to a bank account.


 Giffgaff are a company.  Companies have to file annual accounts....

 

"What's this 'payback to members' figure then ?"

 


True.  But then HMRC would have to request details of the paypal accounts that received payback.  Some people probably receive it into unregistered paypal accounts etc.  It would be an awful lot of investigations.

 

I'm not saying your wrong - it is right to declare it to HMRC, I am just wondering how many people do not report it and whether the majority of those people get away with it.

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Message 16 of 66
Highlighted
by: stealthybigboss
on: 16/12/2011 | 18:09
thanks for payback
Message 17 of 66
by: idrisdragon
on: 16/12/2011 | 19:00

@mastermikeywwt wrote:

under 18s don't have to pay tax and neither do people in fulltime education or on benefits Smiley Wink


you couldn't be more wrong.

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Message 18 of 66
by: whome
on: 16/12/2011 | 19:22

GG needs to change the Payback name into GIFTS as i believe gifts are a non taxable income

Click Below to save on Dosh make some Wonga

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Message 19 of 66
by: stanj028
on: 16/12/2011 | 19:29
All websites seem to suggest that if it stays in PayPal the only reason it would be taxed and/or looked at would be if they thought it was fraudulant.

600 came from an old site I was a member of where if you earned over 600 in a tax year they sent you a tax form.
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Message 20 of 66