Directors loan - P11D and interest repayments

[Zimmy]

My company's year end is 29/2/12

In the month of March I took out a Directors Loan of £10,000.

I charged interest of 4%.

This interest has not been physically paid as at my personal income tax year end of 5/4/12. Only accrued in the company as it is only £33 worth.

I have repaid the loan in full along with interest to July when it was repaid all together in July.

My accountant is saying I have to amend my P11D because the loan was above £5k and I did not repay interest before 5/4/12.

Surely I do not have to physically pay the interest before 5/4/12? As it will all be repaid in my company's year end of 12/13. Surely the mere fact it is accrued and paid in the correct financial year is fine?

The loan was repaid in full before year end. There is no loan outstanding at my company's year end. And a commercial rate of interest was charges so no P11D is required at all.....?

Any help is appreciated.

[Zimmy]

I have trawled through the forums and also came up with the following question:

There seems to be some conflicting posts.

1. If the loan is >£5,000 and you paid the correct interest, you don't need to declare it on P11D
2. If the loan is >£5,000 and you paid the correct interest, regardless, you still need to declare it.
NOTE: at my company year end the loan was NIL.

Which one is correct?

My original question still stands....Surely you don't have to physically repay interest on the loan if its only been around for 30 days? Surely accruing the interest is enough......especially if it's all paid within the company's accounting year.

[Nathan SJD Accountancy]

I have trawled through the forums and also came up with the following question:

There seems to be some conflicting posts.

1. If the loan is >£5,000 and you paid the correct interest, you don't need to declare it on P11D
2. If the loan is >£5,000 and you paid the correct interest, regardless, you still need to declare it.
NOTE: at my company year end the loan was NIL.

Which one is correct?

My original question still stands....Surely you don't have to physically repay interest on the loan if its only been around for 30 days? Surely accruing the interest is enough......especially if it's all paid within the company's accounting year.

Hi Zimmy,

As I understand the situation, your P11d does not need to be amended because there is no BIK to report.

HMRC say, no P11d is required if any of the following exceptions apply:

HM Revenue & Customs: Loans provided to employee

•You provide a loan in the normal course of a domestic or family relationship - for example, if you provide a cheap loan to a family member who works for you. This only applies to loans you make as an individual, not to loans made by a company you control (even if you are the company's sole owner and employee).

•The combined outstanding value of your loans to an employee is less than £5,000 throughout the whole tax year.

•Your loan to an employee is for a fixed and invariable period and at a fixed and invariable rate that was equal to or higher than the official interest rate when the loan was taken out.

•You offered the same type of loan under identical terms and conditions to the general public as well as to your employee (this exception applies mainly to commercial lenders).

•You provide a 'qualifying loan' all of the interest on which qualifies for tax relief - follow the link below for technical
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In my opinion it is irrelevant that you didn't pay the interest, it was applied to the loan taken and repaid in full.