Re: Business bank account interest in 3.50, 3.71 and Profit & Loss Account

claireholmes@xxxxxxxxxxxxxxxx wrote:

If bank interest is paid into my business bank account net of tax then
I will include the relevant figures in boxes 10.2 10.3 10.4 along
with personal bank interest.

Yes. Actually, it is best to do so even if interest is paid gross.
This is because otherwise you would pay tax on it at the wrong rate,
and could end up paying NI on it al well. This is why bank interest
should *never* form part of the total in box 3.73.

In the Profit & Loss Account as I have received the business bank
account interest -net- will I record this in the P&L as a net figure
under Miscellaneous Receipts, or as a gross figure?

As the net figure, since that is what appears on the bank statement.

I will include the business bank interest in box 3.50 of the tax
return and then deduct it off again at box 3.71 but again should the
gross interest figure be used, or the net interest figure be used?

As the net figure, since that is what appears on the bank statement.

As long as net is used in both 3.50 and 3.71, or alternatively gross
is used in both 3.50 and 3.71 then it does not affect 3.73 (net
business profit for tax purposes) as a figure is being added in and
then the same figure deducted off again.

Indeed.

Though would it be best to use the gross or net figure in 3.50 and
3.71? (business bank interest being received net)

As the net figure, since that is what appears on the bank statement.

As an alternative to including the amount in 3.50 and 3.71, you could
exclude it from both, and exclude it from your own P&L to. Instead,
put it as Capital Introduced, to keep the balance *** right.

.