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Bank charges on personal expenditure

Client has company credit card - mix of private and business - charges?

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A have a client, technically the company, which gives a credit card to its only employee, the sole director, also the sole shareholder.

You know the sort of client. I am the company, the company is me.

The client does a lot of foreign business travel, meaning many transactions incur bank charges. He also withdraws cash and incurs even more charges.
Historically, it appears we try and code the business stuff to business, personal stuff to DLA. All bank charges are coded to bank charges and considered a business expense.

Is this right? My gut feeling would be if the client uses the card for personal expenditure, and that personal spend incurs a bank charge, then the bank charge should also be DLA as well.

The amounts aren't huge each time, but there is a LOT of them, usually three or four a month.


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17th Dec 2018 09:07

Yes I think that when the charges can be related to a specific transaction the accounting treatment of them should follow the treatment of the transaction.

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17th Dec 2018 10:54

I wouldn't lose any sleep over putting the annual fee or monthly interest in as a business expense but the individual transaction fees should probably just be lumped in with the transactions to which they relate.

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By frankfx
17th Dec 2018 21:49

May provide some insight.

By the way for a self employed individual the guidance notes SA103 place a £500 limit on interest allowable for tax purposes where cash advances are involved.

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to frankfx
18th Dec 2018 09:01

If it was just in SA103, I'd ignore it. HMRC does not make the rules.

But as it's in s57B ITTOIA 2005, there's not a lot of argument.

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