Originally posted by Lance
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Startup money into a company - Director's Loan the only option?
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Originally posted by Paralytic View PostI really think this thread could have stopped at post #2
https://www.contractoruk.com/forums/...ml#post2679082
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Originally posted by d000hg View PostInteresting, Craig especially (we can ignore that Lance embarrassed themself and tried to back out )
So a DL has no tax implications if it does not charge interest, interest may be charged and this would be a cost to the Ltd (CT relief effectively) but would attract personal income tax past the allowance on tax-free interest - did I get that all right?
Oh and I say Directors Current Account from a technical accounting point of view to mean the company owes you money. A Directors Loan Account is where you owe the company money. The number bods will know what I'm on about!
Originally posted by d000hg View PostA DL does not count as a loss to the company, or does it? e.g. if it pays back a chunk of DL does that count as a loss affecting CT?
Originally posted by d000hg View PostYou mentioned CT61 which is something I'd get the accountant to do, but my query here is how flexible is all this? When doing a DL to the company, does this have to be formalised officially or just noted as such in the books?
In terms of repayment, I understand no formal loan arrangement has to be made, the company can pay it back as and when it decides?
In terms of interest, would that have to be decided at the start, or can I loan £50k and 9 months later decide the company should start paying interest at 3%, then another 6 months later decide the rate is now 5%? THat seems all a bit lax from financial regulations standpoint, which are so strict these days.Comment
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Originally posted by WordIsBond View Post...
Originally posted by Craig@Clarity View PostWhen you do decide that the company should start paying interest on the loan which can be 9 months later if you wish, that is when you should tell Hector that you need to fill in a form CT61. The deadlines for filing these is strict, each quarter and late submissions may generate penalties. It's just a form filing exercise and when you've done it once, it's fairly straight forward. The loan and interest charged doesn't have to be formalised but may need to be noted in the year end accounts under the balance sheet notes. I'd wouldn't recommend changing the interest rate often but if you have a valid motive for doing so and can argue the case, then I can't see why you could increase the rate 6 months later. To keep it simple, perhaps, when you decide you're going to charge the company interest is to set it at say 10% compounded. Keep a little spreadsheet which is formulated and roll the numbers forward.Originally posted by MaryPoppinsI'd still not breastfeed a naziOriginally posted by vetranUrine is quite nourishingComment
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Originally posted by d000hg View PostI wasn't sure these days if you could (officially) loan money to your mate without having to go through money laundering and fraud checksComment
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