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Compensation for financial loss

Awards we make if your small business has lost out financially.

Last updated: 28 January 2021
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  1. The money we can award
  2. Calculating compensation
  3. How compensation is paid

If your small business has lost out financially, we’ll look to put it back in the position it would have been in had the financial business not made a mistake.

How we calculate this compensation depends on what the complaint is about and how your business lost out financially.

The money we can award

If your small business has lost out financially, we can tell the financial business you’ve complained about to compensate you for the loss it caused. Where it’s clear how much you lost, we’ll tell the financial business how much money it needs to pay. For example, if you paid a fee on your account that you shouldn’t have, we might tell it to refund that amount.

There’s a limit to how much we can tell a business to pay. If we think that compensation should be higher than our award limit, we can recommend that the business pays more. But we can't make it pay anything over the limit. It's up to them whether they pay the extra or not. We’ll talk to both sides about what this means at the time.

Compensation can also include interest.

Calculating compensation

Where it’s not clear how much your business has lost, we’ll usually say how we think the financial business should calculate the compensation, rather than telling it a specific amount.

For example, a financial business may have advised you to open an investment or bank account that wasn’t right for your small business. We can tell it to work out any compensation by looking at what your business’s money would be worth now if you hadn’t followed its advice.

Although we tell financial businesses how to calculate compensation, we won’t usually check the individual calculations unless you have a specific concern about them.

How compensation is paid

Most of the time, we’ll tell the financial business to pay any compensation directly to your business.

But there may be exceptions. For example, if you owe money to the financial business, we might say it’s reasonable for it to offset any compensation against the debt. We only do this where we think the complaint has been fairly addressed by doing so.

Any financial compensation can only be paid to your business, not to you or anyone else personally even as a shareholder or director.

Small businesses will need to consider carefully the appropriate tax treatment of any award they receive, and take advice where necessary. You can find more information about this on HMRC’s website.