Are Reward Points Taxable When Earned Through Work?

Many employees accumulate air miles, credit-card points or other loyalty rewards when travelling or purchasing goods for business purposes. Understandably, employers often wonder whether these rewards create a tax liability. The good news: in most routine situations, they don’t.

When Reward Points Are Not Taxable

HMRC generally treats points earned through standard public loyalty schemes as a personal reward for the individual. This applies even where:

• The purchase was made for business purposes

• You have reimbursed the employee for the cost

• A company card was used but happens to collect loyalty points

In these cases, there is no tax to pay and no reporting requirement for the employer.

When Reward Points Are Taxable

A tax charge only arises where the reward is given because of employment, rather than as a by-product of a public scheme. Examples include:

• Air miles or points provided by the employer as a bonus or incentive

• Reward schemes that are exclusively available to employees

• Points issued directly by the employer or through an employer-specific scheme

In these situations, the value of the reward is treated as a taxable benefit.

What This Means in Practice

• Everyday loyalty points earned via business travel or spending are usually tax-free.

• Employer-provided rewards or incentive schemes may be taxable benefits and should be assessed and reported appropriately.

How We Can Help

We can help you stay compliant with HMRC requirements and give you confidence that everything is handled correctly