Tyas & Company
Chartered Accountants, Registered Auditors, Tax, Financial & Business Advisors

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New tax free limit for company loans

Since 6 April 2014 directors can borrow up to £10000 ( previously £5000 ) from their company without a tax charge being triggered. This new limit also applies to existing loans. However if the loan exceeds £10000 by even £1 the whole of the loan becomes taxable as a Benefit in Kind.

Where husband and wife are both directors they each have their own £10000 limit.

Be aware that if the loan is not repaid to the company within 9 months of the company year end the company incurs a tax charge.

There are strict anti-avoidance rules so seek professional advice.

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Stephen Tyas                             Stephen Ayres

 

 

Registered to carry on audit work in the UK by the 
Institute of Chartered Accountants in England and 
Wales and authorised and regulated by the 
Financial Conduct Authority for investment 
business

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Fax: 01293 614312

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5 East Park, Crawley, West Sussex, RH10 6AN