Bank Interest Paid, Bank Charges & Currency Charges: Codes 7900, 7901 & 7902

Running a business bank account rarely comes free — overdraft interest, transaction fees, and currency conversion charges all chip away at the balance in ways worth tracking separately from the trading activity itself.

The codes, and what each one holds

Code 7900 — Bank Interest Paid records interest charged on an overdraft or business loan linked to the current account.

Code 7901 — Bank Charges covers monthly account fees, transaction charges, and similar bank service costs.

Code 7902 — Currency Charges covers costs specifically tied to foreign currency transactions, such as conversion fees or spreads. All three are Overheads codes and normally carry a debit balance.

Real-world examples across industries

Seasonal retail or hospitality

A shop or café runs an overdrawn current account through its quiet months, and the bank calculates interest daily on the overdrawn balance — £145 for this particular month, a debit to 7900 (Bank Interest Paid) and a credit of £145 to 1200 (Bank Current Account), with no VAT since interest is outside its scope. The same business also accumulates card-machine transaction fees and cash-handling charges for paying in daily takings, £68 for the month — a debit of £68 to 7901 (Bank Charges) and a credit of £68 to 1200, again with no VAT since bank charges are an exempt financial service.

Importer or exporter

A business trading internationally pays for several supplier invoices abroad this month by international wire, each one running a flat fee well above a domestic transfer — £210 in total, a debit of £210 to 7901 and a credit of £210 to 1200. On top of that, the bank's exchange rate for converting sterling to settle those invoices includes a margin above the true wholesale rate, adding a further £190 — a debit of £190 to 7902 (Currency Charges) and a credit of £190 to 1200. Because both costs scale with the volume of overseas trade rather than turnover generally, a dedicated FX provider or multi-currency account is usually the first place to look for savings.

Construction subcontractor

A subcontractor uses a revolving credit facility to bridge the gap between paying for materials and labour and being paid by the main contractor — a gap widened further by CIS deductions and retentions held back from what's owed. A month's interest of £310 is a debit of £310 to 7900 and a credit of £310 to 1200. The same month sees several BACS payments to materials suppliers, incurring £18 of transfer fees — a debit of £18 to 7901 and a credit of £18 to 1200. No currency charges feature here at all, since the trade is entirely domestic.

Why this matters day to day

Watching these three codes together gives a clear picture of how much banking itself is costing the business, separate from the interest on any larger, deliberate borrowing tracked elsewhere. Currency Charges in particular is worth reviewing if a business regularly trades internationally, since these fees can often be reduced by switching to a dedicated multi-currency account or payment provider.