Company A loans £15000 to company B in varying amounts within the same tax year. Both companies share the same MD but are completely different entities. Company A has paid for work to set up the office of company B. Company A is paying for an employee to consult for company B. Only the cash loans are in the accounts as inter company loans. The rest is recorded as work to be invoiced.
Company B has paid company A £13000. Is it best to reduce the intercompany loan by this amount or invoice them for work carried out? Which is best for tax purposes? I'm thinking get the loan paid off before the end of the financial year or does it not make any difference if it carries over?
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