2 day loan from Ltd

[BlueDragon]

So I've just put down a deposit on a car. I need to pay the remaining balance £18000 on Tuesday but I can't do that until I get the money from my current car that I am selling. I'll get the money from my current car Thursday. Can my Ltd loan me that £18k for 2 days without any tax implications? I would effectively be cancelling any loan agreement between myself and Ltd within the 14 day cooling off period?

[ladymuck]

I wouldn't have an issue with a loan for such a short length of time.

If you wanted a bit more comfort around it, charge yourself interest and pay that to the company too.


IANAA

[realaledrinker]

TBH, as long at the loan is not outstanding at your company year end, who's to know (or care)?

[BlueDragon]

I should have said that I have a £5k directors loan at the moment too which will be repaid in April. Company year end is end of Feb. So I guess another concern is whether that £5k then becomes a BIK as the total loan amount will have been over £10k (£15k) for two days which will result in the £5k being classed as a BIK? Or am I just overthinking it?

[ladymuck]

If you can avoid there being any loan outstanding at year end, that's best

[TheCyclingProgrammer]

No major implications if it’s repaid in 2 days and the existing loan is repaid before the 9 month deadline following the end of your financial year.

You should charge yourself interest at HMRC prescribed rates for the duration the balance is above £10k to avoid a BIK charge.

[northernladuk]

No major implications if it’s repaid in 2 days and the existing loan is repaid before the 9 month deadline following the end of your financial year.

You should charge yourself interest at HMRC prescribed rates for the duration the balance is above £10k to avoid a BIK charge.

What he says but IMO dont mix personal and company money. It might be possible in the short term but sets a precedent longer term. First this, then what?

[wattaj]

Loans from one's company are allowed. But, there are rules. Keep Directors Loans below 10k. Create paperwork and charge interest (currently 2.5% pa) on Beneficial Loans. Any Beneficial Loan still outstanding 9 months after the year end in which the loan was received will incur a repayable S455 charge on the company to HMRC.

Go for it. Google is you friend.

[BlasterBates]

I would have thought you could delay payment by 2 days with the car dealer.

[ChimpMaster]

Don't buy the car.

Check out leasing options for electric cars and read up on the BIK from April onwards.