My Accountant has always advised me to lend money to the company rather than investing it.
This way, there is no tax to pay on it at year end (if you haven't taken it back yet) as it is not the companies money, and you can take it back anytime you want (i.e. when the company is more flush).
You can even charge the company interest if you want to, but this would have to be declared on your tax returns.
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Capital investment
Does capital investment get taken into account when working out whether you can take dividends out of the business?
For example, if in one trading year a company had sales of £2K, expenses of 3K, capital invested of 2K and cash in the bank at the start of the year of 2K it would give them an end balance of 3k at the end of the year.
Would the profit be £1k (taking investments into account) or would there be a loss of £1K? Based on the outcome it would therefore impact the ability to declare dividends.
TIA
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