Directors loans..

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  • Directors loans..
  • Premier Icon Alex
    Subscriber

    Now before you all start, I AM going to call the accountant but he’s bloody hard work and firstly I want to see if anyone has done this.

    My old (mothballed but still open) company I used for contracting has some cash in it. I don’t want to take it out as dividends because it’ll attract a sh!t load of tax. All I want to do is borrow some for a while to help pay for stuff on the house.

    I remember I paid directors loans in when we were starting the firm, the company paid interest on those and then paid them back when it had sufficient capital. What I want to know is can I take a directors loan out (for personal use) and then pay it back with an agreed rate of base rate linked interest.

    I’d rather borrow money from myself than from the bank. I have a feeling the answer is going to be no, but I wondered if anyone here had any experience.

    Ta

    Premier Icon piedi di formaggio
    Subscriber

    How about you use the capital to build and ‘office’ in your house for the company, and then fold it?

    I’m sure this is high unethical, etc!

    simonfbarnes
    Member

    isn’t avoiding tax just stealing from everyone ?

    Premier Icon Coyote
    Subscriber

    I find myself agreeing with Mr. Barnes here.

    Premier Icon Alex
    Subscriber

    Oh shut up Simon 😉 I could waste my time explaining one of the reasons I stopped running my own company was the insanity of the corporate tax system and the waste within it. But I won’t, because you just want to argue and I just want to get on with my life…

    I’ll bite a little tho. It’s not tax avoidance. I know, I WORK for accountants. That’s what about 1/4 of the practice does for big firms, gets them out of paying tax so the little guys get screwed.

    All I want to do is borrow money I had legitimately made (and paid corporation tax on the profits already!) and then pay it back with interest. No different to borrowing money from the bank and the trousering the interest. So no actual differences in paying tax at all.

    Which means Simon, you’re not just an argumentative idiot. You’re actually just an idiot 😉

    simonfbarnes
    Member

    You’re actually just an idiot

    I’m glad we got that sorted out.

    deadlydarcy
    Member

    I thought “evasion” was stealing. “Avoidance” is just something that people who can afford accountants do. If it’s to pay for fancy new wood floors, then I say go for it Alex. I’m back by the way so drop me a line and we can have a chat and a meet-up.

    Premier Icon ourmaninthenorth
    Subscriber

    Yes. The law changed on 1 October 2007. You need shareholder approval (written resolution).

    TandemJeremy
    Member

    I agree with Simon – avoiding tax is theft and immoral if not illegal

    Premier Icon Alex
    Subscriber

    Darcy – dropped you a mail last week. Will resend.
    OMITN – ta, shall now risk calling bean counter
    TJ – well it’s a stance of sort but entirely irrelevant to this thread.

    Premier Icon chakaping
    Subscriber

    Is the OP talking about avoiding tax?

    If he takes a loan from his company and pays it back, how has the taxman lost out?

    Please explain.

    hora
    Member

    isn’t avoiding tax just stealing from everyone ?

    So is Labour Ministers sending their children to select/private schools.

    Whats your point caller?

    Premier Icon ourmaninthenorth
    Subscriber

    Avoiding tax may be immoral, but necessarily is not illegal. That’s tax evasion.

    Anyway, the company, having earned the interest on the money owed by Alex under his legitimately made director’s loan, will be liable for corporation tax (subject to the applicable rules).

    For once, TJ and SFB, STFU.

    Premier Icon Alex
    Subscriber

    Is this still STW? I think I just heard “the voice of reason” from more than one poster 🙂

    simonfbarnes
    Member

    I agree with Simon – avoiding tax is theft and immoral if not illegal

    sadly that makes you an idiot too TJ 🙁

    simonfbarnes
    Member

    For once, TJ and SFB, STFU.

    could that ever happen ?

    Premier Icon DavidB
    Subscriber

    Al
    HMRC are clued up on this and will now (I believe) tax the loan as a benefit. I guess you have missed out on taper relief for the Capital Gain

    Those of us who take risks with our home, families and finances to create value,jobs and growth thus boosting the economy support the treasury directly and indirectly so never let any ill informed keyboard worrier (sic) guilt you about reducing your tax bill 🙂

    Premier Icon aracer
    Subscriber

    Please explain, hora – how exactly is sending children to private schools, so not burdening the state system with them, stealing from everybody?

    Premier Icon Stoner
    Subscriber

    Maybe TJ and SFB would like to go and start their own “tax avoidance is immoral” thread where they can witter away to their heart’s content in a thread to which the subject would at least be relevant.

    Since Alex is asking about something that simply relates to corporate governance/corporation law why the hell would you feel the need to pipe up about tax law unless it’s the usual case of you two blundering around the forum and stumbling into a thread on a subject you blatantly have no idea about but an all too dense opinion.

    Premier Icon Alex
    Subscriber

    Dave – well that’s not a disaster as Carol is also a Director of the firm so we my be able to use here tax allowance to offset that a little. Yeah I did look at the taper relief but missed the boat there.

    I’m not worried about people having a misinformed pop. It’s my own fault for posting on a bike forum but ta for your (and everyone elses) support and help.

    marcus
    Member

    If you can pay all the loan back to the company within the same financial year, no one (HMRC) need even know!!

    5thElefant
    Member

    I agree with Simon – avoiding tax is theft and immoral if not illegal

    Getting taxed is immoral. Minimising your tax burden is an obligation.

    simonfbarnes
    Member

    Getting taxed is immoral

    let them eat cake… compassion is for wimps

    5thElefant
    Member

    If they weren’t getting taxed they’d be able to afford their own cake.

    Premier Icon Woody
    Subscriber

    Aracer

    You should know not to ask that as Hora was a member of the idiot club long before his comment on this thread 😆

    hora
    Member

    Please explain, hora – how exactly is sending children to private schools, so not burdening the state system with them, stealing from everybody?

    I’m convinced that certain Ministers have been able to offset the cost of such schooling against the tax they pay..

    Premier Icon DavidB
    Subscriber

    “If you can pay all the loan back to the company within the same financial year, no one (HMRC) need even know!! “

    If you get inspected they will as they are able to ask for all bank statements from company and personal accounts. They can then see payments between the two and make their own mind up. You could try cash but money laundering regs. probably require an audit trail at the bank for large amounts so they will have your signature.

    TandemJeremy
    Member

    “hora – Member

    Please explain, hora – how exactly is sending children to private schools, so not burdening the state system with them, stealing from everybody?

    I’m convinced that certain Ministers have been able to offset the cost of such schooling against the tax they pay.. “

    Really? How? School fees are not tax deductible IIRC

    uplink
    Member

    Those of us who take risks with our home, families and finances to create value,jobs and growth thus boosting the economy

    & there was me thinking you did it to make money for yourself when all the time it was a wholly altruistic act on you part – I apologise 😉

    BTW – avoid as much tax as you can
    You could argue that choosing a company cay with low CO2 emissions is tax avoidance

    aP
    Member

    hora – a bit like this Tory MP then?

    Premier Icon DavidB
    Subscriber

    & there was me thinking you did it to make money for yourself when all the time it was a wholly altruistic act on you part – I apologise [:wink:]

    That as well, truth is 75% fail and don’t make anything so risk/reward is high.

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