Contractor UK Bulletin Board - View Single Post

2nd December 2003, 00:14

It's illegal for a company to lend a Director more than £5,000 in all but the most unusual circumstances.

For tax purposes you'll have a BIK if the loan is more than £5k at any stage of the tax year to 5th April i.e. no lending yourself £10000 on 6th April and paying it back on 4th April the next year.

You'll also have 25% tax to pay on the balance still outstanding 9 months after your year end (refundable).

Why not just pay dividends as you go along? As long as there's a dividend minute and a dividend voucher then the Revenue won't be bothered.

Just remember to do the paperwork at the time and also remember to pay any other shareholders at the same time!

2nd December 2003, 00:14	#2
Bradley Posts: n/a	Loans It's illegal for a company to lend a Director more than £5,000 in all but the most unusual circumstances. For tax purposes you'll have a BIK if the loan is more than £5k at any stage of the tax year to 5th April i.e. no lending yourself £10000 on 6th April and paying it back on 4th April the next year. You'll also have 25% tax to pay on the balance still outstanding 9 months after your year end (refundable). Why not just pay dividends as you go along? As long as there's a dividend minute and a dividend voucher then the Revenue won't be bothered. Just remember to do the paperwork at the time and also remember to pay any other shareholders at the same time!