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

In a mess with drawings from the business taken as loans

brownman23
Posts:1
Joined:Thu Jul 20, 2017 12:44 pm
In a mess with drawings from the business taken as loans

Postby brownman23 » Thu Jul 20, 2017 12:54 pm

I started my LTD company about 7 years ago and things went well enough to buy a new home, but in order to help with the deposit I took out quite a large loan through my company (2-3 years ago). The loan has grown in size to a point where I owe just over £70k pounds. The Loan is split between myself who's a director and my wife who's an employee.

The £70k includes the interest that I've been adding at HMRC's official rates, but I just don't know how long I have to pay it back. I'm happy to pay it back, but it would have to be at a fairly slow rate as we have kids at uni we have to support etc, etc.

Can anyone shed any light on the situation? offer any advice.

To add to the stress, the company is being VAT inspected in August and due to the nature of the business changing over the years, the flat rate percentage I've been applying is out by maybe 2%, and I could be facing a problem there too.

am I just sunk...

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: In a mess with drawings from the business taken as loans

Postby bd6759 » Fri Jul 21, 2017 10:33 am

The company ought to have declared the loan in its CT return and paid tax at 25% (now increased to 37.5%) of the amount due.

You ought to have declared the loan as a benefit for income tax purposes.

I presume the loan came from the company reserves and not from a loan the company acquired to give to you?


Return to “Tax Investigations and Enquiries”