Originally posted by luckyknight
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Originally posted by luckyknight
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If you borrowed money from the company when there are insufficient funds to take a dividend then this will have to be accounted for as a director's loan. Be careful to avoid the 25% s455 charge on the loan by clearing it before 9 months after the company year end. You should also understand "bed and breakfasting" of director's loans and why HMRC don't allow it. You are going have to pay 4% interest on the director's loan or it be taxed as a BIK. I suggest you opt to pay the company interest because this becomes company profit and is paid back to you minus Corporation Tax so the net cost of the loan to you is probably only about 1%.
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