Loan the money in business account

[northernladuk]

Ok, I give up. I couldn't find anything in relation to actual end to end loans but a ton of stuff about rules and taxation of directors loans, particularly about paying it off in time or incur 25% tax on it.

There is also the comment somewhere about maknig the loan look like money you have gained without paying tax on it which an end to end loan of years will look like.

Here are the links....

http://forums.contractoruk.com/accou...n-account.html

http://forums.contractoruk.com/accou...-loan-how.html

http://www.hmrc.gov.uk/ct/managing/director-loan.htm

[tyut4669]

Can I not take 10K off business account and pay back 10,400 before year end closes? Does it become benefit in kind.

northernladuk, Please do not respond, if you are not clear. I would appreciate someone give me a precise answer.

[northernladuk]

Can I not take 10K off business account and pay back 10,400 before year end closes? Does it become benefit in kind.

northernladuk, Please do not respond, if you are not clear. I would appreciate someone give me a precise answer.

Yer, sorry about that. I have backed it up with a load of links for reference where I can.

I found these by searching and there are plenty more I couldn't be bothered to read as this has been asked many times. Try it, you might like it.

[escapeUK]

Can I not take 10K off business account and pay back 10,400 before year end closes? Does it become benefit in kind.

northernladuk, Please do not respond, if you are not clear. I would appreciate someone give me a precise answer.

Not knowing the answer never stops him from replying, which is why he is the only person I have on ignore

[tyut4669]

I completely agree. And, this is not the first instance that I have experienced this.

[tyut4669]

I completely agree. And, this is not the first instance that I have experienced this.

I think, anyone who is guessing the answer instead of replying something they know for definite is a disgrace.

[northernladuk]

I completely agree. And, this is not the first instance that I have experienced this.

It is also not the first time you have asked a question about 10K directors loan

http://forums.contractoruk.com/accou...ml#post1275886

or other posts about the mess your accounts appear to be in.

But anyway.....

In this case I am almost sure that end to end loans are not good. I can't prove it so will edit original post to remove offending assumption

[tyut4669]

Read through it. It is a different question gentleman.

It is also not the first time you have asked a question about 10K directors loan

http://forums.contractoruk.com/accou...ml#post1275886

or other posts about the mess your accounts appear to be in.

But anyway.....

In this case I am almost sure that end to end loans are not good. I can't prove it so will edit original post to remove offending assumption

[northernladuk]

Hi NLUK, have you any links for this assertion?

I thought it was ok to do just that.

GOT IT!! Not before I have made a right mess of this thread though Sorry OP. My bad.

Directors Loan Account : Brookson

HMRC’s view
These rules are in place to ensure that directors are unable to simply borrow money from their company instead of paying dividends and not pay any tax. Despite these rules being in place it is an area that HMRC may pay particular attention to if they choose to enquire into your personal or company tax affairs. HMRC may look for regular patterns of loans being taken from the company and or repaid by the director and argue that this should be treated as additional salary giving rise to tax and National Insurance.

What is our advice?
We do not advise that you take money out of your limited company as a director’s loan which results in the loan account becoming overdrawn due to the tax liabilities and added complexity this adds to your affairs. We do recognise that there may be commercial reasons for you needing to borrow money from the company (e.g. a short-term need for personal finance) however; we would encourage you to consider the implications of doing this.

and

<snip>

One suggested idea is to pay the loan off the day before the nine month end and then take it out the day after. However, tax is avoided as in substance there is a loan throughout the period in question and likely to get caught. If you repay the loan a few days before and take it out a few days later then HMRC are likely to argue substance over form. I.e. that essentially there was a loan throughout and the 25% should be accounted for.

[Old Greg]

This all seems a bit harsh to NLUK. I value his input and know he is not an accountant, so take this into consideration. It opens up discussion and leads to a better personal understanding. Perhaps if people don't want to start a discussion, they should ask their accountant.