Bank charges and interest

George Registered Posts: 43 Regular contributor ⭐
:thumbup:Is it possible to claim as a business expense a percentage proportion of bank charges and bank interest paid on a current account that is used for a sole trader's business, which contains, however, about 30% private expenditure? It is an ordinary current a/c, and not a business a/c.

Thanks for any advice.


  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘

    My understanding is that you cannot as the charges fail on the duality test

  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Strictly speaking, Poodle is correct.

    In practice, I would still claim a proportion provided the charges were not excessive and the balance sheet was not overdrawn. Just be aware that it may lead to an argument with the inspector if an enquiry were opened.
  • claudialowe
    claudialowe Registered Posts: 275 Dedicated contributor 🦉
    I had this on a recent investigation. There was a business account but the B/S was overdrawn. The inspector wanted to disallow all interest - we ended up settling at a 25% add back. Had they all been because of "timing" issues I would have carried on fighting, but they weren't!!

    Bank charges he again tried to disallow, but we argued successfully that every business bank account has charges and tuf :thumbup:

    I think, like most other things, let common sense prevail.

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