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

[AtW]

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

I am a bit busy at the moment but I'll be happy to advise HMRC on a few brutal but effective techniques to make people pay taxes as they should.

[Mich the Tester]

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.

The purpose of a business is to make money for whom? Got it in one; the shareholders, and it's the responsibility of directors to do what they believe is in the interests of shareholders.

Loans for directors and employees are quite normal. Good employers recognise that they have a vested interest in their employees' well being. If an employee is facing some problem, like needing money to provide medical treatment for their kids, or simply needs a new car to get to work and back but is short of money due to some other problem, many employers are happy to lend that employee some money; that's because they have the security that they can withhold repayments from salary while their employee is able to continue working. I know a chap here who lent one of his employees money from the company to get a wheelchair adapted car so that he could get to work more easily while suffering from a degenerative disease; do you have a problem with that? I don't; the director did his best to keep a valuable person working for the benefit of shareholders. That's how it should be.

[DodgyAgent]

I am a bit busy at the moment but I'll be happy to advise HMRC on a few brutal but effective techniques to make people pay taxes as they should.

Do you have a business?

[AtW]

The purpose of a business is to make money for whom? Got it in one; the shareholders, and it's the responsibility of directors to do what they believe is in the interests of shareholders.

Businesses have more responsibilities than just to shareholders.

Loans for directors and employees are quite normal. Good employers recognise that they have a vested interest in their employees' well being. If an employee is facing some problem, like needing money to provide medical treatment for their kids, or simply needs a new car to get to work and back but is short of money due to some other problem, many employers are happy to lend that employee some money; that's because they have the security that they can withhold repayments from salary while their employee is able to continue working. I know a chap here who lent one of his employees money from the company to get a wheelchair adapted car so that he could get to work more easily while suffering from a degenerative disease; do you have a problem with that? I don't; the director did his best to keep a valuable person working for the benefit of shareholders. That's how it should be.

Nice in theory but with such system with no caps on loans you get some jackarses that take the piss - use massive loan from company and pay pittance interest compared to what commercially they should have done.

If you want to help employees then you can ask them to get commercial loan from a bank and compensate them full interest they pay via PAYE (which will of course be higher cost due to taxes, but if you really value your employees you should not care about it).

Giving a MASSIVE 0% interest, no security and no terms loan to yourself is not right.

[AtW]

Do you have a business?

I have large share in a business that I founded and continue to run.

Why?

[Mich the Tester]

Nice in theory but with such system with no caps on loans you get some jackarses that take the piss - use massive loan from company and pay pittance interest compared to what commercially they should have done.

Nice in theory but if companies aren't allowed to loan money to employees and directors, they'll loan in natura instead (i.e. 'loaning' someone a Rolex and calling it a Swatch or 'loaning' a director a pile of gold bars and calling them Mars bars in the accounts) which is much more open to abuse than money loans that are in the company's accounts and published at companies house for everybody to see, including Grauniad reporters with nothing else to do than trawling through the accounts of anyone famous, and including AtW.

[doodab]

Yes.

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

And what if said director needs to trot off abroad for several months on business? There is actually special provision to advance a sum as expenses but that only covers £1500 IIRC so it's handy to be able to take a loan to cover the rest, and that seems perfectly reasonable when the end result is £30k of fees that will be subject to UK corporation tax and UK income tax on the resulting dividends.

[Mich the Tester]

And what if said director needs to trot off abroad for several months on business?

Wot? Like a professional athlete who travels abroad to compete?

[MarillionFan]

I have large share in a business that I founded and continue to run.

Why?

Don't believe you. If you're the Managing Director of a top successful business... What the fook are you doing posting on here all day & night?

[AtW]

And what if said director needs to trot off abroad for several months on business?

Ever heard of a company debit card?!?!