Questions and Answers
Overdraft interest
I have my own company but it’s got a few cashflow issues so I’ve been paying for business expenses using my own account. However, my bank account is now overdrawn as a result. Am I able to recharge the company some of the interest I’ve incurred?
No, I’m afraid legislation specifically excludes a tax deduction for overdraft or credit card interest. Directors’ earnings are employment income and so no deduction is due.
Had you been operating as a sole trade or partnership, this may have been possible.
If your business is experiencing cashflow problems, you may benefit from meeting with your local TaxAssist Accountant that could give you tips and budgets to help you manage the peaks and troughs in your business.
Date published 5 Dec 2012
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.Choose the right accounting firm for you
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