The 'who's' getting shafted over tax avoidance thread?

[SupremeSpod]

His company is apparently now getting lots of applications for interest free no fixed term and no security needed loans

Do you know what a "Directors Loan" is?

[DodgyAgent]

It's not a problem if the business is about loaning money and has got it in articles of association that massive loans to directors at low interest rates without security are ok

I have a business loan at 0% interest. I do not need any articles of association or board meeting, and my business is not a money lending business either. The loan has been oustanding for 3 years and the taxman has no problem with it whatsoever

[AtW]

Do you know what a "Directors Loan" is?

Yes.

And no - unless the business is a bank, building society or loan shark such loans should not be given to directors or employees.

[AtW]

I have a business loan at 0% interest. I do not need any articles of association or board meeting, and my business is not a money lending business either. The loan has been oustanding for 3 years and the taxman has no problem with it whatsoever

And the taxman should have problems with such arrangements - it makes no business sense to give loans at 0% interest or give loans in the first place if company does not specialise for it. Quite why this is allowed under current tax system is a mystery to me.

I don't have any loans from company.

[MarillionFan]

Yes.

And no - unless the business is a bank, building society or loan shark such loans should not be given to directors or employees.

Oh even I'm interested in hearing how AtW explains away this latest idiotic statement.

[Mich the Tester]

Yes.

And no - unless the business is a bank, building society or loan shark such loans should not be given to directors or employees.

Are you serious? You want British company law to state that a company can't lend money to a director who owns all the shares in the company? Or an employer can't lend money to an employee to help them through if some problem occurs that they can't immediately pay for?

Oh dear.

[AtW]

Oh even I'm interested in hearing how AtW explains away this latest idiotic statement.

Gladly.

A purpose of any business should be making money rather than giving below market rate loans to employees or directors - the only valid case is banks who can feel that having employees/director is actually lower risk because they are better aware of their earnings.

Quite why 0% loans are not deemed sham transactions is beyond me.

[SupremeSpod]

Yes.

And no - unless the business is a bank, building society or loan shark such loans should not be given to directors or employees.

Come back when you've a clue.

Oi! AtW hasn't got a clue, has anyone got a spare he can borrow?

[AtW]

You want British company law to state that a company can't lend money to a director who owns all the shares in the company? Or an employer can't lend money to an employee to help them through if some problem occurs that they can't immediately pay for?

Yes - there are plenty of companies that specialise in loans and anybody who needs one should approach those.

If the company in question has got banking license of equivalent then it might be ok to allow a very small %-tage of total loans such company makes to give to employees at slightly lower rate.

[DodgyAgent]

And the taxman should have problems with such arrangements - it makes no business sense to give loans at 0% interest or give loans in the first place if company does not specialise for it. Quite why this is allowed under current tax system is a mystery to me.

I don't have any loans from company.

I will give HMRC a call and ask them to get you to give them some advice.