This page is not tax advice and is not a substitute for an accountant. UK tax depends on how your business is set up (sole trader, partnership, limited company) and on the current scheme terms. We do not publish tax rates. Confirm the position with your accountant or a tax adviser before you treat a reward as tax-free.
What these schemes are
If you are a heating installer, you may already be on a manufacturer scheme such as Vaillant Advance (now being replaced by myREWARDS, covering Vaillant and Glow-worm), Baxi Works, or an equivalent from Worcester Bosch or another maker. You register eligible installs, accumulate points or cash, and redeem them for vouchers, branded merchandise, tools, catalogue goods, or a business cheque / cashback.
The schemes are a commercial incentive to register product and stay loyal to a brand. They are not a tax-free perk by default. Several published terms put the tax liability on the installer. Baxi Works, for example, says points and rewards may be taxable and that any tax is your sole responsibility.
Cash and cash-equivalent rewards
As a general rule, if the business receives cash or a cash equivalent — a business cheque, BACS cashback, or a voucher that can be exchanged for cash — you should treat that amount as a taxable receipt and put it through the books. Your accountant will say how it sits in the accounts (usually trading income). Do not assume a manufacturer cheque is a gift.
That matches the older hub note: cash or a cash-equivalent cheque is the reward you are most clearly liable to account for yourself.
Products and other non-cash rewards
Tools, branded kit, TVs, and other catalogue goods are often treated differently from cash. The original hub page — and what Vaillant told us when we asked — was that non-cash items are often taxed by the scheme provider, so the installer does not always have a further tax bill on the product itself.
That is a useful starting point, not a rule you can rely on without checking. Schemes change their catalogues and terms. A product used privately, or passed on, can still have a tax consequence even if the provider says they have accounted for tax on the redemption. Read the current T&Cs and ask your accountant before you treat a reward as settled.
Passing rewards to employees
If you gift vouchers or products to staff, HMRC treats that as an incentive award or a benefit. The outline below follows current HMRC-style framing. It is not a complete payroll manual, and exemptions exist.
Cash or a cheque to an employee
Include the amount in the employee’s gross pay. Deduct PAYE tax and Class 1 National Insurance through payroll, and report it on the Full Payment Submission for that period. If a third party pays cash to your employee, HMRC still expects the employer to deal with the Class 1 NI; the payer may handle the PAYE. Get payroll advice if that happens.
Vouchers
- Cash vouchers (exchangeable for cash) count as earnings. Add the value to pay and deduct PAYE and Class 1 NI through payroll — the same shape as cash.
- Non-cash vouchers (goods or services only) are usually a benefit. Typical HMRC treatment is Class 1 NI through payroll on the cost (or face value in some cases), with income tax reported as a benefit — often on form P11D — rather than deducted as PAYE, unless you payroll benefits. Some vouchers are exempt; check HMRC’s voucher pages.
Products and other non-cash awards
Goods given to an employee are typically a benefit in kind. Many such awards are reported on P11D (or payrolled) and attract employer Class 1A National Insurance, not the Class 1 that applies to cash and many vouchers. The old hub line that “vouchers or products mean Class 1 NI” is too blunt for goods. If a third party provides a non-cash award and you did not arrange it, reporting can sit with the employee — that is easy to get wrong, so ask payroll or your accountant.
What Vaillant told us
When we checked with Vaillant, they said only their business cheques required the installer to account for their own tax. That was a manufacturer statement about their scheme at the time — not HMRC guidance, and Advance is now myREWARDS. Treat it as historical confirmation of the cash-versus-product split, then confirm the live position with Vaillant / myREWARDS and your accountant.
What to do in practice
- Keep a record of what you redeemed, the date, the face or catalogue value if you have it, and who actually received the item.
- Put cash, BACS, and business cheques through the accounts in the period you received them.
- Do not pass catalogue items or vouchers to employees without considering payroll, P11D, or a PAYE settlement agreement.
- Read the scheme’s tax clause each year — terms move when brands merge schemes.
- Ask your accountant before the year-end, especially if you take a mix of cash and goods, or if you are a limited company extracting rewards personally.
Related
- Advice — other heating guides
- HMRC: vouchers — what to report and pay
- HMRC: employee incentive awards
Guidance only, written against the hub article and public HMRC pages in October 2026. Manufacturer schemes and tax rules change. This site does not act as your accountant.