Bank charges

By Tolley in association with Philip Rutherford
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The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Bank charges
  • Introduction
  • Routine payment of employee’s bank charges
  • Exceptional payments
  • Reporting requirements

Introduction

An employer may reimburse bank charges suffered by an employee. The tax, NIC and reporting requirements associated with reimbursement of the bank charges will depend on the reason behind their reimbursement and whether the reimbursement comes within meaning of earnings in ITEPA 2003, s 62. The tax consequences of paying such fees will depend on whether the reimbursement is a benefit to the employee or compensation for loss. It is the construct or rationale behind these payments that will determine the tax and reporting consequences.

All issues regarding bank charges are covered in EIM01010.

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