Question:
Can bank charges for drawing money out of a director’s loan account via an ATM be regarded as a legitimate business expense?
Arthur Weller replies:
Strictly speaking if the director’s loan account (DLA) is in debit, this is not an expense that is ‘wholly and exclusively’ for business purposes, and therefore should not be allowable. However, if the DLA is in credit, and by withdrawing money from the ATM the company is repaying the loan that it has borrowed from the director for business purposes, then it would seem to be allowable as a "making a payment under a loan relationship" expense - see here.
