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Director's loans

If you owe your company money, your personal and company tax responsibilities depend on how the loan is repaid.

Option 1 - you repay the loan with 9 months of year-end
Pay your company interest at the HMRC official rate - currently 2%

Option 2 - you do not repay the loan within 9 months
In addition to the interest at the HMRC official rate, use form CT600A to show the loan amount owed at the end of the accounting period.  Pay 32.5% corporation tax on the amount outstanding.  You can reclaim the tax when the loan is repaid, but not the interest.

Option 3 - the loan is "written off"
Put the loan amount written off through the company payroll and pay any PAYE due to HMRC





 

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