Many credit card companies, banks and shops pay rewards for the
recovery of lost or stolen credit cards, cheque guarantee cards and
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.