Company Premium Bonds?

[workshy fop]

The other thread on premium bonds got me thinking.

It's probably a non-starter but could I use company money to buy the maximum amount of premium bonds?

Failing that, is £5k still the maximum amount you can take as a directors loan?

Cheers

Fop

[workshy fop]

Well got the first one answered. They can only be registered in an individual's name, so no companies

[Eric Mc]

Where did you get the £5k limit from?

Loans by companies to directors are technically illegal under Company Law and are subject to a penalty Corporation Tax charge at 20% (commonly referred to as Section 419 tax), particularly if they remain uncleared at the company's annual year end date. Such loans must also be declared in the notes to the accounts ststing the director to whom the loan relates and the terms and conditions under which the loan stands to be repaid.

There IS a £5,000 limit in respect of the necessity to disclose such a loan (assuming it is interest free or interest is charged below the bank base rate) on the annual Benefit in Lind declaration form P11d and the Inland Revenue will not levy a Benefit in Kind tax charge on a loan below this level

[workshy fop]

Eric Mc said:

Where did you get the £5k limit from?

My accountant told me.

I assumed it was all above board, if under £5k for under a year. Just thought it might be worth a dabble then pay it back before the year's up.

[Eric Mc]

All loans to directors are illegal.

The £5,000 limit is purely a Benefit in Kind declaration limit.