BKM203200 | Bank compensation restriction: excluded expenses: administrative errors

Expenses arising in respect of administrative errors are excluded expenses. This test looks at the original reason for compensation becoming due. For instance, where a bank has mis-sold a product or mis-advised a group of customers, but then fails to notify customers in a suitable timeframe or to deal with complaints properly, this would not be an excluded expense because the test applies to the initial mis-selling or mis-advice.

HM Revenue & Customs would expect issues falling within this exclusion to primarily involve routine processing and handling errors which arise in the day-to-day business of the bank.