Director loans

[Olly]

1) Benefit in Kind - If loan less than £5k no taxable benefit, so no 12.8% class 1a and no income tax at 20 / 40% on cash equivalent of loan, ie interest at 4.75%

Cheers

Neil

Just had a bit of a shock on this, I thought the interest was only to be paid on the amount over 5K (on advice of accountant) when now I find out it's the full loan amount.

If I pay full interest on the loan to my Ltd is that it done and dusted? No Benefit in Kind no nothing?
Thanks

[Maslins]

Just had a bit of a shock on this, I thought the interest was only to be paid on the amount over 5K (on advice of accountant) when now I find out it's the full loan amount.

If I pay full interest on the loan to my Ltd is that it done and dusted? No Benefit in Kind no nothing?
Thanks

Yup.

The benefit in kind effectively tries to treat the interest you should have paid on the loan as additional income received by you from the company. This is on the whole amount of the loan.

The £5k bottom limit is simply to eliminate the need for P11Ds for all employees who get a season ticket loan for trains/similar. The paperwork/admin involved would be pretty hefty for a tiny amount of tax.

[Olly]

Thanks,
So I would declare nothing on P11D if full interest was paid on loan?
Same accountants are talking about how they would need to alter P11D

[Lumiere]

"If you’re a company director or ‘participator’ and take money out of your company that's not a salary or a dividend - over and above any money you’ve put in - you’re classed as having received the benefit of a director’s loan."

.. and expenses ?