B2B Trade Card

Anyone any experience?

Didn't find your answer?

I've been approached by B2BTradeCard and was wondering whether anyone had any experience?

The general idea is that X Ltd pays, say, £100 in 'advertising' costs to B2B, Mr X receives £80 in Mastercard points on a prepaid card. It's a profit extraction method that has been okayed by Abbey Tax.

 

 

Replies (9)

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Psycho
By Wilson Philips
07th Aug 2019 15:31

So the idea is that the company pays £100 and gets CT relief at, say, 20% so the net cost to the company is £80. That £80 is then paid back to the director, supposedly tax-free?

I'd be interested to see Abbey Tax's rationale.

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Replying to Wilson Philips:
ALISK
By atleastisoundknowledgable...
07th Aug 2019 15:46

Yes that the idea.

I think the important bit was that the £80 isn't £80, it's 80 points worth £1 each that can't be exchanged for cash. Also that the prepaid mastercard is available to all staff (wink wink, nudge nudge).

Abbey Tax quoted EIM21618

Apparently B2B have been going 5 years and they have 2 competitors who have each been going 10 years.

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By MissAccounting
07th Aug 2019 15:49

I had a similar thing with something called BBX currency, was a complete waste of time listening to the rep (self employed of course) waffle on for an hour for me to ask what I can spend the BBX "money" on given I dont do any advertising...

Stay clear and stick with sterling is my advice.

Thanks (1)
Replying to MissAccounting:
ALISK
By atleastisoundknowledgable...
07th Aug 2019 15:55

I think the difference here is that its mastercard points, on a chip&pin & contractless mastercard which can (so said the salesman) "be used to pay for anything except HMRC debt, cash, betting companies and bizarrely pay@pump fuel".

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Replying to atleastisoundknowledgable...:
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By paul.benny
07th Aug 2019 15:59

Pay at pump fuel transactions pre-authorise £99 (effectively reserving this sum against the balance or credit limit) which is then released when the actual transaction is processed. It prevents fuel being dispensed when there are insufficient funds.

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By paul.benny
07th Aug 2019 16:18

It's blatantly artificial* and the surprise is that the promoters have got away with it for so long.

* which doesn't necessarily mean it's unlawful. After all, lots of multinationals artificially route transactions through low tax countries and they get away with it.
I would, though distinguish this from airmiles on the basis that the benefit here is very large in relation to the spend.

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Replying to paul.benny:
Psycho
By Wilson Philips
07th Aug 2019 19:23

I would also make the distinction (not that I’m certain that it matters) that Air Miles “belong” to the individual in that he has “earned” them by doing the travelling.

In this case there is no such nexus and the individual is receiving a significant financial benefit as a consequence of his employer’s expenditure. I also agree that a reward of £80,000 for a spend of £100,000 is blatantly excessive (again, whether that makes any difference in law I’m not sure).

Finally, one also has to consider whether an individual member of the general public would receive the same reward (on the assumption that said member of the public would be prepared to spend £100,000 to receive £80,000 of credit to be spent on a limited range of products).

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By Accountant A
08th Aug 2019 13:14

atleastisoundknowledgable... wrote:

The general idea is that X Ltd pays, say, £100 in 'advertising' costs to B2B, Mr X receives £80 in Mastercard points on a prepaid card.

What's the basis for claiming a deduction for £100 worth of advertising which presumably you don't get? Doesn't look very W&E to me.

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