Bank charges on mixed use accounts

Bank charges on mixed use accounts

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I work for a small practice with 2 partners and about 30 staff.

We have quite a few clients who use their bank accounts for both business and private purposes - Where the income from the business and expenses are paid out of the accounts but there is a fair amount of private use too. In some cases, there are more private expenses than business, although the income is usually predominantly from the business.

My initial reading from the Internet is that bank charges and interest on these bank accounts are not deductible as the bank account is not "wholly and exclusively" for business purposes.

However it is standard in our practice to include these charges - My manager said he would argue they were deductible because the account was where all the income from the business was paid in.

Is he correct?

Would other members in practice include these charges?

H.Reynolds

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