2 day loan from Ltd

[wattaj]

Don't buy the car.

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

Is this REALLY such good advice given the current climate and the likelihood of contractor limited companies dying out?

[Lance]

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

Credit card would make sense.

[WordIsBond]

For loans over £10K, you have to pay interest to YourCo at the official rate, or more. The official rate is 2.5%.

The amount of interest you pay is 2.5% * loan balance * whole months the loan is outstanding / 12. Beneficial loan arrangements (480: Chapter 17) - GOV.UK.

The number of whole months the loan will be outstanding is zero.

So, you have to pay interest, but the interest due will be zero.

Confirm with your accountant, of course. But I can't see any reason you can't do this.

I'd definitely recommend clear paperwork with a minute of a board meeting confirming the loan, the term and amount. I'd make it terminate the 5th, personally, just in case your money is delayed, but so as to terminate it in the same tax month in which it was issued. I don't think it matters if it is outstanding for less than 30 days, but I wouldn't want to give HMRC any wiggle room for claiming it was a month since it crossed tax months. That's probably an excess of caution, however, but it's what I'd do.

[GhostofTarbera]

For loans over £10K, you have to pay interest to YourCo at the official rate, or more. The official rate is 2.5%.

The amount of interest you pay is 2.5% * loan balance * whole months the loan is outstanding / 12. Beneficial loan arrangements (480: Chapter 17) - GOV.UK.

The number of whole months the loan will be outstanding is zero.

So, you have to pay interest, but the interest due will be zero.

Confirm with your accountant, of course. But I can't see any reason you can't do this.

I'd definitely recommend clear paperwork with a minute of a board meeting confirming the loan, the term and amount. I'd make it terminate the 5th, personally, just in case your money is delayed, but so as to terminate it in the same tax month in which it was issued. I don't think it matters if it is outstanding for less than 30 days, but I wouldn't want to give HMRC any wiggle room for claiming it was a month since it crossed tax months. That's probably an excess of caution, however, but it's what I'd do.

Good advice but zzzzzzzzzz

It’s for 2 days, do it buy car


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[SimonMac]

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.

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

I thought the loan has to be repaid 9 months after the end of the financial year? Why is it heat to have it cleared at the end of the financial year?

[ladymuck]

I thought the loan has to be repaid 9 months after the end of the financial year? Why is it heat to have it cleared at the end of the financial year?

That's not what I said.

Yes it does have to be repaid by then but if you don't have anything outstanding at year end, it's one less excuse for HMRC to want to have a poke about

[SimonMac]

That's not what I said.

Yes it does have to be repaid by then but if you don't have anything outstanding at year end, it's one less excuse for HMRC to want to have a poke about

Ah fair enough

[ladymuck]

Ah fair enough

My tin foil hat says HMRC may want to see evidence of repayment and while they've got the hood open let's have a little look about...

[GhostofTarbera]

My tin foil hat says HMRC may want to see evidence of repayment and while they've got the hood open let's have a little look about...

HMRC are the enemy now

No more friendly fire


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[GhostofTarbera]

My tin foil hat says HMRC may want to see evidence of repayment and while they've got the hood open let's have a little look about...

In what universe would they even care

Bad bad advise


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