Paying back Loan

[SandyD]

You still have to be wary of bed and breakfasting though. Paying it back before year end to keep it off your books and then take it out straight away again will still fall foul of the new rules as per the bottom half of this link.
What is a Director's Loan Account? We Explain The Rules | Crunch

I never understood who wants to do the bed and breakfasting concept? Like why take 10K then return it again if you haven't used it to do something useful or invest in something?? Unless people just leave it sitting in an account that will bring them better % or perhaps for an offset mortgage... but I was talking originally about loans one take to invest in something personal...

The original question was answered... when you pay back the loan you only pay CT on the % charged

[WordIsBond]

OP, your original post sounded like you had engaged in a course of action whilst having very serious gaps in your knowledge. That course of action has caused a lot of trouble for a lot of people precisely because they followed it without knowing all the ramifications.

You got your answer. And you got push-back. IMO, you deserved both, based on your original post. If the original post didn't fully reflect how much you know about the topic, that's hardly the fault of other posters. You sounded like a babe in the woods about to get eaten by a big bad wolf. Instead, you got barked at by the friendly neighbourhood dog telling you to get back to a safe place. Maybe you had a gun in your pocket and were ready to slay the wolf, but he couldn't know that from what you said.

Woof, woof.

[WordIsBond]

I never understood who wants to do the bed and breakfasting concept?

Somebody who doesn't really have £10K free, but can scrape it together for a few days.

Maybe they have a mortgage payment of £1.5K due on the 5th and a car payment of £500 on the 10th and they have £5K in their bank account. They borrow £5K from Mum & Dad for a few days, pay off the £10K loan on the 30th, then borrow it back on the 2nd. Pay Mum & Dad back and they have the money for their mortgage and car payment. Sorted.

But HMRC says no, that's bed and breakfasting, you haven't really paid that loan off, it's a fiction. Has to be paid off for at least a month before you can borrow it again.

[SandyD]

OP, your original post sounded like you had engaged in a course of action whilst having very serious gaps in your knowledge. That course of action has caused a lot of trouble for a lot of people precisely because they followed it without knowing all the ramifications.

Nope, I asked before any action, actually I wanted to know the answer before speaking to my tax advisor... I have now - in writing his reply, and will have a meeting with him in the next few week... I never action things without his advise.

You got your answer. And you got push-back. IMO, you deserved both, based on your original post. If the original post didn't fully reflect how much you know about the topic, that's hardly the fault of other posters. You sounded like a babe in the woods about to get eaten by a big bad wolf. Instead, you got barked at by the friendly neighbourhood dog telling you to get back to a safe place. Maybe you had a gun in your pocket and were ready to slay the wolf, but he couldn't know that from what you said.

Woof, woof.

Heh excuse me.. yes I didn't know that CT tax is only on the %... because actually I never took a director's loan of any significant and not paid it back within a short period ... but hey you can pass your judgement freely on me, its totally your prerogative... am used to this forum and people attacking each other for daring to ask a question.. eat my shortslol... I asked the question on the accounting forum.. and wont stop asking cuz your judgements don't deter me...

[WordIsBond]

Not passing judgment on your actions or your knowledge. Just telling you what your first post sounded like.

yes I know with %

Not if less than 10K. Sounds like babe in the woods.

would the monthly payment back trigger CT tax as well

Shows complete ignorance as to what a loan is. Also shows complete ignorance, if you are paying back interest, as the different treatment of interest and capital/principal repayment.

I'm glad you check with your accountant first, and there's nothing wrong with asking on a forum first. It lets you assess whether your accountant is giving you straight answers (they do get things wrong) and sometimes even helps you know which questions to ask. I wouldn't discourage you from doing that. But you might have had a more pleasant ride of it if you'd done a little more research before asking and so been able to avoid sounding quite so ignorant. That's a red rag to a bull to our more aggressive forum watchdogs.