I'm looking to clarify wither taking a director's loan (say £4999) is conditional on the purpose of the loan and the financial situation of my company.
I will be beginning my first contract in the next couple of weeks. I have already earned around £22k this year from my full time job which I will be leaving and have been recommended by my accountant to take no salary for the remainder of the tax year and instead only take dividends up to the lower tax threshold.
I'm not sure wither this will give me enough cash to fulfil my personal financial commitments. I therefore would like to take a directors loan from the company - which I would repay on on April 2nd 2012 - of £4999 to avoid having to extract dividends at the higher tax rate and carry me over to 2012.
My 2 questions:
1. Would HMRC have a problem with this given I would have sufficient funds to take dividends?
2. If I repaid the loan with a dividend would the amount repaid contribute towards my total personal taxable income for the year?
Thanks,
Graeme
I will be beginning my first contract in the next couple of weeks. I have already earned around £22k this year from my full time job which I will be leaving and have been recommended by my accountant to take no salary for the remainder of the tax year and instead only take dividends up to the lower tax threshold.
I'm not sure wither this will give me enough cash to fulfil my personal financial commitments. I therefore would like to take a directors loan from the company - which I would repay on on April 2nd 2012 - of £4999 to avoid having to extract dividends at the higher tax rate and carry me over to 2012.
My 2 questions:
1. Would HMRC have a problem with this given I would have sufficient funds to take dividends?
2. If I repaid the loan with a dividend would the amount repaid contribute towards my total personal taxable income for the year?
Thanks,
Graeme
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