Report queries small business banking charges

Some small businesses could be paying more than they need to for their banking, according to financial information group Moneyfacts.

The organisation reported that small businesses are now paying an average of £10 more a month than in 2002, when the Competition Commission found that some banks were levying excessive charges on small business accounts.

The Commission advised that banks should pay interest on accounts, or alternatively offer free banking services.

However, according to Moneyfacts, some banks are continuing to levy excessive monthly standing charges, or charges for paying in funds, and for setting up standing orders and direct debits.

Stephen Alambritis of the Federation of Small Businesses has called on the Government to reconsider the issue of bank charges.

The Office of Fair Trading is due to review the situation early next year.