2 limited companies and moving money between the two

[paulxedos]

Hi,
I have two limited companies ( which I now regret but that's another story) - one for contracting, the other for amazon business
I need to draw from the contracting company to pay for stock purchases for the amazon company. My accountant says if I am not selling the goods via the contracting firm then it is seen as a dividend for which tax is liable.
The suggestion offered by the accountant is to close down the amazon firm, operate all the stock selling through the other firm and then switch the name 3 months down the line to reflect the original Amazon firm (so just run the one company). This seems like a really painful way of getting the money out of the other business as all my payment and banking systems reflect the amazon company

So my question is, bearing in mind that I need to buy stock in the next 2 weeks, is there any other way of moving money between the two without incurring big tax penalties?

Thanks
Paul

[JamJarST]

How much money are we talking here? I would think you could draw up a loan between the two companies? Altenatively you could take a directors loan from one company and then loan that to the other.

[paulxedos]

Hi
Probably around £30k in total
Cheers
Paul

[Craig@Clarity]

How much money are we talking here? I would think you could draw up a loan between the two companies? Altenatively you could take a directors loan from one company and then loan that to the other.

A loan between two companies is fine if they both stay open, but would need to be repaid upon closure. A directors' loan would be the same - it would have to be repaid upon closure. The loan would be repaid via a dividend most likely, so that's where the tax kicks in.

A loan would be fine if both companies stay open, just the usual benefit in kind and Section 455 issues to be aware of.