Question regarding directors loan and BIK

[diseasex]

Hi, I have a question regarding directors loan .
I have 3% interest on santander and was thinking of withdrawing funds temporarily and paying it back just before account submission to HMRC or partially when VAT is due.... To my understanding if the director loan is not carried over to the next year, then they cant find out unless they review me ? I have read HMRC site on this topic and to my understanding BIK only applies when DL is carried over for next accounting period?

Normally i would inform my accountant but they dont do account reconciliation , which im happy about for above reasons so i dont want to tell them
Your thoughts?

[TheCyclingProgrammer]

Whether or not a director's loan is a BIK has nothing to do with how long you borrow but how much you borrow. Loans up to £10k can be taken interest free without incurring a BIK. Loans above this amount must be charged interest at HMRC's published rates otherwise there is a BIK (on the difference between the interest charged and HMRC's rate).

There is also the s455 charge on any amount outstanding 9 months after the end of your company year which is what it sounds like you were thinking of. This would not be repayable until 9 months after the year in which the loan is repaid.

So to avoid complications you can borrow what you like so long as:

a) Its under £10k or you charge yourself the correct amount of interest
b) Its repaid within 9 months of the end of your company year
c) You leave enough money to pay your company's liabilities as they become due

[northernladuk]

Doing stuff without telling your account is pretty silly, particularly with such a bad understanding of what you are doing... and with the VAT mans money. Nothing good will come of it. Tell your accountant, use the 10k limit as described which is all above board and the account shouldn't have a problem with and sleep soundly.

[northernladuk]

Oh and read up on bed and breakfasting as well. There are rules in place to stop you loaning it back out to yourself too quickly. HMRC will see it as income and not a loan and tax you on the lot.

[northernladuk]

Better still check out the Aldermore business savings account and stay away from all this marlarky
http://www.aldermore.co.uk/business/business-savings/

[diseasex]

If you guys say so
i had an itch to hide it and repay back before anyone notices, and pocket the interest...

[northernladuk]

If you guys say so
i had an itch to hide it and repay back before anyone notices, and pocket the interest...

Cool. Don't they call that tax evasion though?

[AnotherGuy]

There is no need to overcomplicate things.

You can open a company RateSetter (P2P lending) account where you can stick a big chunk of money (all of it if you want to and are willing to take the risk) for 1 year or, monthly if you prefer.

I put all the money I'm going to need to pay VAT and potential corporation tax in a savings account in my business bank at 0.75% and the rest goes to RateSetter at ~3.3% monthly. Yearly it would be more, around 4.5% but I'm happy with monthly for now.
I have also a personal RateSetter account where I stick my personal money.

Send me a private message if you want to open an account, I can refer you and you will be credited £50
(I don't want to spam with my referrer link obviously)

[diseasex]

There is no need to overcomplicate things.

You can open a company RateSetter (P2P lending) account where you can stick a big chunk of money (all of it if you want to and are willing to take the risk) for 1 year or, monthly if you prefer.

I put all the money I'm going to need to pay VAT and potential corporation tax in a savings account in my business bank at 0.75% and the rest goes to RateSetter at ~3.3% monthly. Yearly it would be more, around 4.5% but I'm happy with monthly for now.
I have also a personal RateSetter account where I stick my personal money.

Send me a private message if you want to open an account, I can refer you and you will be credited £50
(I don't want to spam with my referrer link obviously)

Not interested in risking company money, was after 100% sure interest in monthly intervals

[AnotherGuy]

Not interested in risking company money, was after 100% sure interest in monthly intervals

It is quite low risk actually. In fact in 5 years they've been in business nobody have ever loose money, as defaulted loans are repaid from a provision fund. Other P2P are more concerning.

The risk would be a massive default bankrupting the provision fund. That's why even considering it low risk myself, I don't put all the eggs there, only a part. Just in case...

It was just an idea.