Reply to: reverse directors loan

[ContrataxLtd]

You can make an interest free loan for a certain amount. I guess it should be a maximum of £10,000 if it is not changed recently.

The OP is/would be loaning the money to his company, not borrowing it from the company, therefore, he could lend as much as he wants if he so wishes.

The £10,000 limit is only applicable for loans to a director/shareholder from the company.

Martin
Contratax Ltd

[northernladuk]

You can make an interest free loan for a certain amount. I guess it should be a maximum of £10,000 if it is not changed recently.

Being an accountant that purportedly specialises in one man setups should you not know this????

You guess??!?

[northernladuk]

Interesting. Thanks

[ContrataxLtd]

That's interesting and certainly goes against the wholly and exclusively mantra no? Assuming the insurance is more expensive the company would be incurring costs for personal use and the wife would be getting free insurance for no business reason. The whole duality/wholly and exclusively is ignored in this situation?

The duality of purpose/wholly & exclusively argument is in a way ignored when a BIK comes in to play because when something is being taxed as a BIK it is deemed to be wholly and exclusively for business use as part of the remuneration package of the employee/director.

The wife is receiving the insurance by means of her husbands employment/directorship so it is him who is taxed on the BIK (assuming wife isn't involved in the company).

Also, at the end of the day all the insurance is doing is protecting a company asset and is therefore wholly and exclusively for business purposes.

Same argument goes for company cars, they aren't used 100% for business but they are still an allowable cost because there is a BIK in the charge to tax.

Martin
Contratax Ltd

[northernladuk]

OP would definitely be best speaking to his accountant to get the ins and outs of this. To specifically cover your insurance point, provided the policy was in the company name and paid from the company account it would be fully allowable as it is in relation to the provision of the company van (assuming this is owned by the company). The insurance is allowed to cover named drivers but this gives rise to a VAN BIK on the employee/director, the policy is still 'wholly and exclusively' for business use.

Martin
Contratax Ltd

That's interesting and certainly goes against the wholly and exclusively mantra no? Assuming the insurance is more expensive the company would be incurring costs for personal use and the wife would be getting free insurance for no business reason. The whole duality/wholly and exclusively is ignored in this situation?

[babybel]

cheers.

I'm waiting for my accountant to get back but they are being so slow these days I've finally got my arse in gear to switch.

I'll post back when I have anything more.

Thank you both!

[ContrataxLtd]

You won't be able to claim your insurance costs through the company as it's not wholly and exclusively?

Wouldn't your accountant really the best person to ask, particularly when it's a little more complicated than normal?

If you do find out it would be good if you could come and tell us what you eventually did.

OP would definitely be best speaking to his accountant to get the ins and outs of this. To specifically cover your insurance point, provided the policy was in the company name and paid from the company account it would be fully allowable as it is in relation to the provision of the company van (assuming this is owned by the company). The insurance is allowed to cover named drivers but this gives rise to a VAN BIK on the employee/director, the policy is still 'wholly and exclusively' for business use.

Martin
Contratax Ltd

[northernladuk]

You won't be able to claim your insurance costs through the company as it's not wholly and exclusively?

Wouldn't your accountant really the best person to ask, particularly when it's a little more complicated than normal?

If you do find out it would be good if you could come and tell us what you eventually did.

[ContrataxLtd]

I'd say first stop is your insurance to see if insuring company vehicles allows personal drivers. Might have to shop around.

The fact it's parked at your address at night means it has duality of purpose so you'd always be paying BiK on it regardless of who else is insured wouldn't you?

Company Vans are taxed differently to company cars, they are allowed to be taken home in certain circumstances without giving rise to a benefit in kind. However, as OP has already said he'd be using it to then a BIK would arise so adding another named driver shouldn't have any impact on this.

Insurance shouldn't be an issue either in my opinion, just take out a policy that covers both OP and the named driver for business & personal use.

[babybel]

thanks.

So I've done a very basic go compare style insurance check. I need to pick up the phone, when I'm not pretending to work. It IS an option to have a named driver.

I guess my questions are more HMRC based. I don't always have the right words.
Does having a named driver who has nothing to do with the business invalidate it being a company van in any way or is the named driver just covered under the flip side (the personal use / BIK side of having the van)?& is there any issue with loaning the co. money? I can't see why, I'm not trying to put one over anyone here, just avoid giving company money away to a 3rd party in interest.

[northernladuk]

I'd say first stop is your insurance to see if insuring company vehicles allows personal drivers. Might have to shop around.

The fact it's parked at your address at night means it has duality of purpose so you'd always be paying BiK on it regardless of who else is insured wouldn't you?

[babybel]

The former.

There's enough save for liabilities as you say.

[babybel]

also business van insurance & a 2nd named driver.

Also, I'm proposing to pay BIK / NI / fuel for a little bit of personal use. Is there any issue with adding my (non business) partner as a 2nd named driver.

[northernladuk]

When you say not enough, is this not enough because you've got your tax liabilities stored safely somewhere else, or you literally don't have enough and you'll need to empty the account?

[Kenny@MyAccountantFriend]

Yea there is no issues with this. You simply repay yourself as and when required.