Directors Loans and BIK

[northernladuk]

Thanks. I am meeting / well calling some Accountants next week. In the initial meeting should I tell them everything or wait till afterwards? During the initial meeting I am not his client so where does client confidentiality fall?

I have only ever had one accountant.

Just get on with it. You are making mountain of a molehill. Changing accounts is common and they will all be very well versed on it. I would mention it straight off the bat as its something you need to get cleared up quick. To them your question is pretty trivial and I'd be surprised if they didn't give you the answer in the same call.

Stop dithering and do it.

[ladymuck]

Thanks. When I change Accountant who do I need to inform? Or will the Accountant deal with that?

You should send an email to both new and old accountants confirming the change and giving authorisation to the outgoing accountant to provide any and all information the new accountant requires in order to take over.

Then leave them to it.

[Isotope]

Why do you care about client confidentiality?
Accountants aren't known for sharing what is probably really dull information about people, just because they're not a paying customer.
It would be bad for business.
In breach of their professional obligations.
And quite possibly illegal depending on the details.

Those three things will keep them schtum a lot more than you paying them £100 a month.

Thanks. When I change Accountant who do I need to inform? Or will the Accountant deal with that?

[Lance]

Thanks. I am meeting / well calling some Accountants next week. In the initial meeting should I tell them everything or wait till afterwards? During the initial meeting I am not his client so where does client confidentiality fall?

I have only ever had one accountant.

Why do you care about client confidentiality?
Accountants aren't known for sharing what is probably really dull information about people, just because they're not a paying customer.
It would be bad for business.
In breach of their professional obligations.
And quite possibly illegal depending on the details.

Those three things will keep them schtum a lot more than you paying them £100 a month.

[Isotope]

With this amount of money and potential penalties not wanting to mess up means get a new accountant and get them to sort it. Shouldn't take long as they are busting for business. Give Sarah Solo a call at PaperRocket a call. She's on the ball and should be able to pick this up quickly for you.

Thanks. I am meeting / well calling some Accountants next week. In the initial meeting should I tell them everything or wait till afterwards? During the initial meeting I am not his client so where does client confidentiality fall?

I have only ever had one accountant.

[Isotope]

Would you not offset what you've loaned the company against what you borrowed, leaving a net £1k owing? As that's under £10k you should't need to declare it. Make sure the loans are documented properly. A loan ought to attract a commercial rate of interest too...

Beneficial loan arrangements - HMRC official rates - GOV.UK

I looked at that and it read 2.25%.

[ladymuck]

What would happen if the director loan from the person to the Ltd was substancial ? Use 100K as a round number for a full year

Could you as a personal tax payer charge the Ltd interest and if so what rate is appropriate?

There's heaps of threads about director loans. No need to start another one. This was a specific question whilst inbetween accoutants.

[NowPermOutsideUK]

What would happen if the director loan from the person to the Ltd was substancial ? Use 100K as a round number for a full year

Could you as a personal tax payer charge the Ltd interest and if so what rate is appropriate?

[northernladuk]

Yes, but he never got back to me and now has taken early retirement due to covid. So I need to find a new accountant as well! But don't want to mess anything up in the meantime.

With this amount of money and potential penalties not wanting to mess up means get a new accountant and get them to sort it. Shouldn't take long as they are busting for business. Give Sarah Solo a call at PaperRocket a call. She's on the ball and should be able to pick this up quickly for you.

[ladymuck]

Would you not offset what you've loaned the company against what you borrowed, leaving a net £1k owing? As that's under £10k you should't need to declare it. Make sure the loans are documented properly. A loan ought to attract a commercial rate of interest too...

[Isotope]

Did you ask your accountant?

Yes, but he never got back to me and now has taken early retirement due to covid. So I need to find a new accountant as well! But don't want to mess anything up in the meantime.

[northernladuk]

Did you ask your accountant?

[Isotope]

I have loaned money to my company over a period of years but never withdrawn it. I think it's about £5k in total.

Last year I have taken out a £40k loan from my company in August 2020 and I have repaid 34k of it in Feb 2021 - £6k is still outstanding. My company accounting yar ends in March.

Is it better to declare this is a BIK or to pay interest on the amount at the HMRC rate of 2.25% so there is no BIK.

What are the tax implications and accounting issues?