This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Can I pay interest on directors loan by voting a dividend?

Eck
Posts:26
Joined:Fri Oct 11, 2013 12:14 pm
Can I pay interest on directors loan by voting a dividend?

Postby Eck » Sat Apr 15, 2017 3:55 pm

I have a DL of around 20k. My understanding is that to avoid NIC and BIK I will need to pay my Ltd Co interest at the official rate?

That being the case, can I vote a dividend to cover the amount or do I have to physically take the cash out and put it back in again?

Thank you

bd6759
Posts:4267
Joined:Sat Feb 01, 2014 3:26 pm

Re: Can I pay interest on directors loan by voting a dividend?

Postby bd6759 » Sat Apr 15, 2017 7:09 pm

To avoid a personal tax liability, there has to be a requirement to pay interest: it has to be a condition of you getting the loan. Where do you intend to debit the interest charge?


Return to “Business Tax”