UK Accounting Glossary
A kickback is a payment of money, favours, or some other value to another individual to perform a certain desired action or to make an important decision in the kickbacker’s favour. The desired action is often a referral that results in a transaction that benefits the person who paid the kickback.
A kickback can be either legal or illegal, depending on the circumstances of the action. A kickback is generally done in secret. In investing, a common kickback is a broker’s reduced commission charged to someone who invests frequently through the broker. Another example is referral payments for finding clients. Kickbacks occur not only in business but also in government sectors.
The US government has laws that prohibit kickback behaviour.
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This glossary post was last updated: 10th February 2020.