Many credit card companies, banks and shops pay rewards for the
recovery of lost or stolen credit cards, cheque guarantee cards and
cheque books.
Where the rewards are paid to employees of banks or retailers
who recover these documents in the course of their work these
payments are taxable as earnings within Section 62 ITEPA 2003 (see
EIM00515). If the payments are made to
the employer's own employees PAYE is operated in the normal way.
For details of the modified system of PAYE which is applied
in certain cases where rewards are paid to the employees of a third
party retailer see PAYE Manual, subject “Payment Card Reward
Scheme” in business area “Employer Records”,
section “Set Up Employer Record”.
Rewards paid to members of the public are not taxable.
