corporation tax

[Gonzo]

directors loan will be paid off within 9 months after year end so it should work out ok.
the question was is it feasible to pay last years corp tax out of the following years profits

As long as you can pay the bills when they fall due you are OK.

[framework]

directors loan will be paid off within 9 months after year end so it should work out ok.
the question was is it feasible to pay last years corp tax out of the following years profits

[Sockpuppet]

If you say so, but I'd read this http://www.hmrc.gov.uk/ct/returns/director-loan.htm



Of course you do get a reclaim of the CT when the loan is eventually paid off.

And yes, there are also BIK issues.

I stand corrected. Fecking stupid system.

[ASB]

Nope. CT is paid on profit not balance sheet. Taking a directors loan does not affect the amount of CT paid.

Its a BIK if its outstanding after 9 months of year end.

If you say so, but I'd read this http://www.hmrc.gov.uk/ct/returns/director-loan.htm

Your director’s loan account is not paid off within nine months of the company’s year-end
If your director’s loan account is not paid off in full within nine months after the end of your company’s accounting period:

you must include details of the loan in your Company Tax Return
your company must pay Corporation Tax on the loan
HMRC will charge interest on the amount unpaid
The current tax rate for director’s loans is 25 per cent of the outstanding loan.

For example, your company’s accounting period runs from 1 April 2008 to 31 March 2009. Your director’s loan account is overdrawn by £10,000 on 1 January 2010. You need to include information about this loan on your Company Tax Return. You should add £2500 (£10,000 x 25%) to how much Corporation Tax you must pay.

Of course you do get a reclaim of the CT when the loan is eventually paid off.

And yes, there are also BIK issues.

[Sockpuppet]

Don't forget that CT ought to be paid on the loan if it is still outstanding 9 months after the year end.

Nope. CT is paid on profit not balance sheet. Taking a directors loan does not affect the amount of CT paid.

Its a BIK if its outstanding after 9 months of year end.

[ASB]

Don't forget that CT ought to be paid on the loan if it is still outstanding 9 months after the year end.

[Grinder]

Yes you can do this.

I'd expect your accountant to ask you what you were doing as your balance sheet in the accounts isn't going to look healthy but still as long as its paid then no worries.

With a balance of £4500 in the bank (ie £2k short of the CT liability) and the 'friendly' debtor of £4000 director's loan giving £8500 liquid assets, I reckon the balance sheet will look great with only £6500 creditors.

[Sockpuppet]

Yes you can do this.

I'd expect your accountant to ask you what you were doing as your balance sheet in the accounts isn't going to look healthy but still as long as its paid then no worries.

[jmo21]

CT for your co YE of July 09 will not have to be paid until roughly May 2010.

He knows that, it's not what he asked.

As i have 9 months after year end to pay this

The answer is......you should be fine.

[BolshieBastard]

A quick question on corp tax which i'm sure has been asked before.

company year end is 31/7/09 at which i have roughly worked out corp tax will be due of 6.5k.

I have calculated i will be short of around 2k to pay this tax due to a training course earlier in the year reducing funds in the business account and also a 4k directors loan taken.

As i have 9 months after year end to pay this am i able to save money in the business from the next tax year to pay this, or does it all have to be paid from this years income?

CT for your co YE of July 09 will not have to be paid until roughly May 2010.

[framework]

A quick question on corp tax which i'm sure has been asked before.

company year end is 31/7/09 at which i have roughly worked out corp tax will be due of 6.5k.

I have calculated i will be short of around 2k to pay this tax due to a training course earlier in the year reducing funds in the business account and also a 4k directors loan taken.

As i have 9 months after year end to pay this am i able to save money in the business from the next tax year to pay this, or does it all have to be paid from this years income?