Are UK bank switch bonuses taxable?

For most people, no. HMRC’s widely reported position is that one-off incentives paid to individuals for switching a current account aren’t taxable income, in the same way that cashback on a purchase isn’t.

This is general information and isn’t tax advice. There are a few edge cases to know about before you collect a lot of them.

Interest is taxed as savings income. That includes the interest on a regular saver you open to get a bonus, which Santander’s offer requires.

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 doesn’t count towards that at all.

From April 2027 the tax on savings interest above the allowance goes up by 2 percentage points, to 22%, 42% and 47%. The allowance itself stays the same.

A few tax firms treat switching bonuses as miscellaneous income. That would still be tax-free for most people under the £1,000 trading and miscellaneous income allowance. Ongoing monthly account rewards are less clear-cut than a one-off bonus.

If you’re collecting large amounts, or you run a business and switch a business account, ask HMRC or an accountant about your own situation.

Australia may want to know too. That depends on whether you’re still an Australian resident for tax purposes while you live here. Many people who move to the UK aren’t, and the test looks at your ties to Australia as well as where you live.

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.