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Investment, director loan tax 50k route

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

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live4pride
- thin ice -
Posts: 136
Joined: Fri Dec 05, 2014 10:32 am
Location: UK

Investment, director loan tax 50k route

Post by live4pride » Fri Dec 19, 2014 1:41 am

Hello everyone,

I had 50k in my account which came into business account and then went back into personal account. 2 employees for me working part time for now. I want to put 10-15k back into business account and start paying them every month which I was doing initially via my earnings from the business already.

Since they are part time no tax to pay- happy days! But my accountant said I'll have to pay tax on 10 or 15k. Because personal money will be converted into director loan which is subject to 25% tax. When I checked HMRC website it does mention about taxes. To me I do not see any other way round to avoid taxes if I have to put money back in business account and invest it. Any idea if I have been advised correctly by my accountant coz am sure many of us are/will be doing director loan part during the course of time.

Please feel free to comment and enlighten me with your valuable comments :)
Regards,
where there's a will there's a way

ishfaqsangra
- thin ice -
Posts: 866
Joined: Wed Aug 14, 2013 10:10 pm
Pakistan

Re: Investment, director loan tax 50k route

Post by ishfaqsangra » Fri Dec 19, 2014 10:59 am

I think corporation tax is on the profits not on loans.

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