The short answer for most people, where interest is different, the bit tax firms disagree on, and what Australians in the UK should also check.
13 Sep 2026 · 4 min read
For most people, no. HMRC’s widely reported position is that one-off incentives paid to individuals for switching a current account are not taxable income, in the same way that cashback on a purchase is not.
That is general information, not tax advice, and there are a few edges worth knowing before you collect a lot of them.
What is taxable: interest
Interest is different. The interest on a regular saver you open to get a bonus (Santander’s offer requires one) counts as savings income.
Most people pay nothing on it because of the Personal Savings Allowance, which lets basic-rate taxpayers earn £1,000 of interest a year tax-free and higher-rate taxpayers £500. Interest inside a Cash ISA does not count towards that at all.
Where people disagree
Not everyone reads it the same way. A few tax firms treat switching bonuses as miscellaneous income, which would still be tax-free for most people under the £1,000 trading and miscellaneous income allowance. Ongoing monthly account rewards are also less clear-cut than a one-off bonus.
If you are collecting large amounts, or you run a business and switch a business account, ask HMRC or an accountant about your own situation.
A one-off switch bonus: generally not taxable. Interest on the savings that come with it: taxable above your allowance.
If you are Australian
The UK is only half the question. Whether Australia wants to know depends on whether you are still an Australian resident for tax purposes while you live here. Many people who move to the UK are not, but it depends on your ties to Australia, not just where you sleep.
If the ATO still counts you as a resident, you may have to declare income from overseas, which can include UK interest. The ATO’s guidance on tax residency is the place to start.
Keep a simple record
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The bank, the amount and the date each bonus was paid.
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The interest from any regular saver or savings account, from your annual statement.
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That is all you would need if anyone ever asks.
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