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Free Guides for new and growing businesses from HRBS - fixed fee accountants and business advisors

Loans to directors

loans to directors Loans to directorsThe good news … a company can loan a director up to £10,000 without shareholder approval.

The bad news … HMRC consider interest free loans to directors as benefits in kind.

Where the loan (or total if more than one loan) is over £5,000 the benefit (interest), calculated at the HMRC official interest rate (currently 4% pa) is taxable and must be reported on form P11d by 6th July and included in the director’s personal tax return.

If the director pays the company interest (minimum 4% pa), there is no benefit in kind.
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Thinking of starting a business?

hrbs.biz guide to starting a business Thinking of starting a business?If you are turning a hobby into a business or starting a whole new venture, here are some tips to help you get up and running without falling foul of the (UK) tax authorities.

Bear in mind that your self employment income will be added on to your income from all other sources when calculating your tax bill.

However, if you make losses you can offset those against your other income for the tax year, thereby potentially getting a tax refund.

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