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?

1st March 2012

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.

 

By Jo Nockels

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