If you have a loan or overdraft facility in your bank, you will sometimes incur interest on these balances. This account represents the extra amount you pay for those facilities.
Bank or financier interest incurred on loans or overdrafts.
Interest incurred on late payment of taxes or other amounts owed to suppliers.
What's not included
Exchange Rate Variance is not the same as interest paid.
How is it taxed?
Tax relief should follow your accounts but if you have any complex hedging, derivatives tax advice may be required. Also if you have interest free loans please check with a tax adviser if this may trigger any additional reporting (typically under directors loan account or arms-length principles).
Look at the restriction link below if you are planning to claim over £2 million in interest deductions for the year.
Interest will be shown on your tax return as 'loan relationship' income and 'deficits' (expenses).