So I've just put down a deposit on a car. I need to pay the remaining balance £18000 on Tuesday but I can't do that until I get the money from my current car that I am selling. I'll get the money from my current car Thursday. Can my Ltd loan me that £18k for 2 days without any tax implications? I would effectively be cancelling any loan agreement between myself and Ltd within the 14 day cooling off period?
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2 day loan from Ltd
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I wouldn't have an issue with a loan for such a short length of time.
If you wanted a bit more comfort around it, charge yourself interest and pay that to the company too.
IANAA -
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I should have said that I have a £5k directors loan at the moment too which will be repaid in April. Company year end is end of Feb. So I guess another concern is whether that £5k then becomes a BIK as the total loan amount will have been over £10k (£15k) for two days which will result in the £5k being classed as a BIK? Or am I just overthinking it?Comment
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No major implications if it’s repaid in 2 days and the existing loan is repaid before the 9 month deadline following the end of your financial year.
You should charge yourself interest at HMRC prescribed rates for the duration the balance is above £10k to avoid a BIK charge.Comment
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Originally posted by TheCyclingProgrammer View PostNo major implications if it’s repaid in 2 days and the existing loan is repaid before the 9 month deadline following the end of your financial year.
You should charge yourself interest at HMRC prescribed rates for the duration the balance is above £10k to avoid a BIK charge.Last edited by northernladuk; 25 January 2020, 03:42.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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Loans from one's company are allowed. But, there are rules. Keep Directors Loans below 10k. Create paperwork and charge interest (currently 2.5% pa) on Beneficial Loans. Any Beneficial Loan still outstanding 9 months after the year end in which the loan was received will incur a repayable S455 charge on the company to HMRC.
Go for it. Google is you friend.---
Former member of IPSE.
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Many a mickle makes a muckle.
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Don't buy the car.
Check out leasing options for electric cars and read up on the BIK from April onwards.Comment
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