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Where Taxpayers and Advisers Meet

Tax on an outstanding directors loan

Jon_sh
Posts:1
Joined:Tue Jan 04, 2022 8:57 pm
Tax on an outstanding directors loan

Postby Jon_sh » Tue Jan 04, 2022 9:01 pm

Hello,

If I have a directors loan of £200 which has not been paid back within 9 months and 1 day, in one financial year and proceed to pay the 32.5% Corporation tax on that loan...

Then, the next year, the loan has not been repaid, but has in fact grown to £2500... In this year, do I have to pay tax on £500, or do I have to pay tax on £2500 - Baring in mind I already paid tax on £2000 the previous year.

All articles I have read state that I have to pay tax on the outstanding amount, but none of them have information on outstanding amounts that already attracted corporation tax which has been paid.

I have not been able to get hold of my accountant today and I need to get the answwer to this. Thanks in advance.

bd6759
Posts:3641
Joined:Sat Feb 01, 2014 3:26 pm

Re: Tax on an outstanding directors loan

Postby bd6759 » Thu Jan 06, 2022 11:32 pm

You pay tax on loans advanced during the accounting period. In year 2, £500 was advanced.

(I’m presuming you mean £2000 was advanced in year 1)


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