Loans to directors – beware of the higher section 455 charge
Directors and shareholders in close companies are often able to influence the payments that are made to them. Broadly, a close company is one that
Directors and shareholders in close companies are often able to influence the payments that are made to them. Broadly, a close company is one that
In a personal or family company the director will often borrow money from the company. This can be an easy source of finance, and also
Transactions between a director and his or her personal or family company are common and a director’s loan account is simply an account for recording
Where a family company has cash in the bank but profits have been adversely affected by the pandemic, directors of a family company may wish
Regardless of the business structure (for example limited company or sole trader) it is possible to employ family members. This has some obvious advantages including
The Covid-19 pandemic has had an adverse effect on millions of family companies, potentially reducing or eliminating profits. Where there is cash in the business
Dealing with directors’ loans For accounting purposes, cash transactions between a director and a personal or family company are recorded through the director’s account. At
Directors’ loans – Beware of ‘bed and breakfasting’ It can make sense financially for directors of personal and family companies to borrow money from the
Directors’ loan accounts – avoiding the risks HMRC produce a series of toolkits which set out common errors that they find in returns. The hope
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