Lending money from my Ltd Co to a Director (me)

I need some cash, about £2k, at short notice for a short period. Can I lend it to myself from my Ltd Co? The cash is in the account, I’m the sole director, and it’ll be paid back at the end of the month.

I’ve dropped a mail to my accountant, but while I wait for him to come back to me, what does STW think?

I suspect for £2k you’d need to have a licence to lend money.

Can you not just advance yourself some wages and pay the tax and NI a bit earlier?

Can you not just advance yourself some wages and pay the tax and NI a bit earlier?

I could take a dividend, but I’d rather not.

who are the shareholders?

actually, that probably doesn’t matter if it’s only £2k – think you’re allowed to do it without shareholder approval for low amounts.

who are the shareholders?

That would be me, I hold all the shares. Well, the share.

Yes, you can do it.. google Directors Loan Account

ask your bean counter, but I think you can have a directors loan account

even better, though as i say i don’t think it matters if it’s under £10k. I think a ltd company can just loan that amount to a director without any hurdles.

but i probably wouldn’t rely on what i say as gospel!

Yes you can, try an make sure you pay it back within your financial year otherwise you will incur a tax penalty.

even better, though as i say i don’t think it matters if it’s under £10k. I think a ltd company can just loan that amount to a director without any hurdles.

A business associate of mine borrowed £345,000 from his company, no hurdles.

If you need it just for a short time and will pay it back, just do the transfer to yourself and then pay it back in ASAP, don’t show it on your accounts. There is only a very slight chance of being investigated by the rev and they are hardly going to kick off about £2k for a few weeks, esp if they can see has been paid straight back in.

KINGTUT – Member

even better, though as i say i don’t think it matters if it’s under £10k. I think a ltd company can just loan that amount to a director without any hurdles.

A director associate of mine borrowed £345,000 from his company, no hurdles.

well there you go. i thought you would have needed shareholder approval, obviously not. was this for a company with third party shareholders?

Yeah, I’ve done that a couple of times – so long as you pay back the loan in the same tax year you’re fine. Probably best to double check with your accountant though just to be on the safe side…

well there you go. i thought you would have needed shareholder approval, obviously not. was this for a company with third party shareholders?

Good point, I don’t think so, so in a similar position to the OP.

I want to do this with 5K until April, so I have just asked my accountant.

Will let you know the result.

my recollection of business law and dealings with directors is that under £10k you don’t need shareholder approval. above that you do, unless it’s a money lending company lending money on normal terms. i guess if you’re the sole shareholder you wouldn’t be made to go through the process of notifying yourself even if above £10k so that may have been the situation with your mate, KT.

No problem, via the Director’s loan account and if you don’t want to pay it back you can declare dividends as income. Although if its overdrawn for a certain amount of time i believe you have to pay interest via your tax return , but your accountant will deal with all that.

Leaving aside any issues on grammar….

Legal up to £10k (thereafter, shareholder approval is required).

For tax matters, HMRC do some useful guidance. Oh, and remember, if the company goes belly up while the loan is outstanding, you still have to pay it back….

As above, directors loan – pay it back before the end of the financial year else you have to either declare it as salary or dividend and pay some wedge to George

Do you need to pay any interest on this? Maybe a nominal sum. Guessing it would be considered a benefit and need to be declared somewhere (P11d maybe).

Edit: search for booklet 480 and see the beneficial loan section.

Do you need to pay any interest on this? Maybe a nominal sum. Guessing it would be considered a benefit and need to be declared somewhere (P11d maybe).

Not if inside tax year.

Just take it out as petty cash if it’s just for a short period. If anyone asks just say you were going to buy a laptop,vehicle, office furniture etc in cash, but didn’t end up buying anything, simples.

If you don’t require a shareholders agreement, normally shown in your articles of association, then draw the money required and post if to your directors loan account. If you already have a loan account that has a credit balance then you are only removing money that is owed to you by the company. If after you’ve drawn the funds you end up with a debit balance so long as it is below £10,000 and repaid within 9 months of the year end you have no corp tax S419 issues.
With the loan been less than £5000 there will be no benefit in kind either.

paydayloans.com? a snip at 2500%!

Sole Director of own Ltd Company wanting to do things above board shocker!!! 😯

I’m sure that never happens in real life, does it? 😉

You need to PM me n this if its possible on this primitive forum, baically there is no problem taking money from your on company for your own use, you should really be paying yourselfthis way for tax efficiency. Assuming you are making profits you simply vote yourself a dividend which attracts less tax (and you don’t have to pay so much NI so dont contibute as much to the welfare of our health professions to waste their days and our money on internt forums)

So in brief, pay yourself about 6k a year on PAYE, the rest you take and vote a dividende back to your directors loan account every year, it attracts a lower rate of tax.

Get yourself a proper accountant who’ll confirm this.