DLA and using it to reduce debt burden

[TheCyclingProgrammer]

Yes, this would be caught by bed and breakfasting rules. HMRC would consider that there was no intention to repay the loan and the subsequent loan would be treated as a continuation of the previous one, meaning you’ll be liable for a s455 tax charge until the loan is repaid. You would also have to pay interest on the loan or face a BIK charge.

[ladymuck]

bug or feature?

Depends on your perspective, I guess!

[Lance]

Threads break when they're moved at the moment.

bug or feature?

[ladymuck]

Threads break when they're moved at the moment.

[Lance]

How much chearper? It's gotta be pretty close to hardly worth doing?


Like we say to PSCONT. If you are so intentent on taking the piss why are you asking us. Just get on with it.

If your intenet with the DL is to take money out, pay it back and then take it out later then will be seen as income by HRMC and be taxed as such. Is the saving really worth this level of stupidity?

Can we move to General like PSCONT's do please.

it can go in general now I have the answer (the one I expected not the one I wanted

[northernladuk]

thanks. That's what I thought.
Interest rate of 2.06% for the mortgage so that's cheaper than the tax on the loan.

How much chearper? It's gotta be pretty close to hardly worth doing?

I'll go into full dodgy mode now.
If I was to link the offset savings account (it's a separate sort code and account number) to FreeAgent. A cursory inspection, in fact anything short of a full audit would not notice I think. Other than the fraudulent use of company money, and probable GAAR breach. Any downsides?

*I miss pscont he was entertaining and I'm sick of MVL discussions*

Like we say to PSCONT. If you are so intentent on taking the piss why are you asking us. Just get on with it.

If your intenet with the DL is to take money out, pay it back and then take it out later then will be seen as income by HRMC and be taxed as such. Is the saving really worth this level of stupidity?

Can we move to General like PSCONT's do please.

[northernladuk]

This is one of those questions, that we see less of these days as everyone is closing their company.

I have a friend .
With an offset mortgage.
Can she take £100k as DLA, and offset the mortgage? Yes is the answer to that...
bear with me.

She pays the loan back before company year end. Waits a bit, then takes it out again. Rinse and repeat.

legal?
evasion?
is it bed and breakfasting?

Thankfully we see less of them because they are generally daft ideas that are best avoided. We get the odd muppet brings it up though

[eek]

thanks. That's what I thought.
Interest rate of 2.06% for the mortgage so that's cheaper than the tax on the loan.

I'll go into full dodgy mode now.
If I was to link the offset savings account (it's a separate sort code and account number) to FreeAgent. A cursory inspection, in fact anything short of a full audit would not notice I think. Other than the fraudulent use of company money, and probable GAAR breach. Any downsides?

*I miss pscont he was entertaining and I'm sick of MVL discussions*

the account isn't in the company name though so it's still dodgy.

Back in 2008/10 I think you could have got away with it due to the risk of a bank going belly up taking your company's money with it (beyond the £85k guarantee). I suspect you couldn't argue that now.

[ladymuck]

Ah, so it looks like another bank account on the books? Sneaky. I like it.

I don't use FA so not sure but if you can link an account in the demo version, it might be worth trying that to see how the account name comes through and whether it's editable to look official

[Lance]

It is bed and breakfasting - better to just have a long term loan and pay the tax.

thanks. That's what I thought.
Interest rate of 2.06% for the mortgage so that's cheaper than the tax on the loan.

I'll go into full dodgy mode now.
If I was to link the offset savings account (it's a separate sort code and account number) to FreeAgent. A cursory inspection, in fact anything short of a full audit would not notice I think. Other than the fraudulent use of company money, and probable GAAR breach. Any downsides?

*I miss pscont he was entertaining and I'm sick of MVL discussions*

[ladymuck]

I thought if the DLA was over 10k you had to pay "something" on it (I'm tired and can't remember the term)

[eek]

This is one of those questions, that we see less of these days as everyone is closing their company.

I have a friend .
With an offset mortgage.
Can she take £100k as DLA, and offset the mortgage? Yes is the answer to that...
bear with me.

She pays the loan back before company year end. Waits a bit, then takes it out again. Rinse and repeat.

legal?
evasion?
is it bed and breakfasting?

It is bed and breakfasting - better to just have a long term loan and pay the tax.

[Lance]

This is one of those questions, that we see less of these days as everyone is closing their company.

I have a friend .
With an offset mortgage.
Can she take £100k as DLA, and offset the mortgage? Yes is the answer to that...
bear with me.

She pays the loan back before company year end. Waits a bit, then takes it out again. Rinse and repeat.

legal?
evasion?
is it bed and breakfasting?