Director Loan

[aclassey]

Hi

I started a ltd company in July...I put £4k in the business account to get it off the ground (I'm yet to pay myself from the business). It's doing well and is making a profit. My question is, is the £4k considered as a Directors Loan, and if so, can I simply withdraw that £4k so I get my money back? And would this incur a tax liability at all?

Many thanks

A.

[jamesuk28]

I dont think its classed as a Directors loan as these can attract a tax liability. However I may be talking complete bks.

Eric MC is the man you need, he will pop up in a minute no doubt

[stuthemong]

AFAIK you can take the £4K back, and a small amount of interest on it too, should you wish. I think that the interest would then have to be declared on your SA though, so maybe not worth it.

Well done on getting the company off the ground

[monthefish]

This thread might be of use

(Complete with contribution from Eric!)

[monthefish]

Bernie-the-bolt on the other thread said:

In simple terms any money you invest in the company can be credited to what's called a directors loan account. Money from that can be removed whenever you like and it's tax free as it is your money. You can also charge your company interest on any funds that you lend (normally base rate + a few % but nothing too silly )

This was my understanding of the situation.

[Eric Mc]

monthefish said:

Bernie-the-bolt on the other thread said:

In simple terms any money you invest in the company can be credited to what's called a directors loan account. Money from that can be removed whenever you like and it's tax free as it is your money. You can also charge your company interest on any funds that you lend (normally base rate + a few % but nothing too silly )

This was my understanding of the situation.

A director's loan account can be in two directions - money lent to the company by the direcytor or money lent to the director by the company.

The Revenue are not that concerned about the first situation but definitely do not like the second i.e. directors borrowing from their companies.

If you loan money to your company, you are entitled to receive that money back from the company with no tax implications.

[aclassey]

That's great...thanks everyone for helping me on that.

A

[E36GUY]

Good thread for me too. I've paid for all the google adwords for my co out of my account so good to know I can have the money back!

[aclassey]

Funny...that's exactly what I did to start, then I placed money in my business account and paid google from there.