Pro-Taxman

Directors loan

Tax implications of making loans to directors

Where a family company has cash in the bank but profits have been adversely affected by the pandemic, directors of a family company may wish to take a short term loan to enable them to meet personal bills, with a view to clearing the loan with a dividend payment when business picks up. This can …

Tax implications of making loans to directors Read More »

Paying family members

Regardless of the business structure (for example limited company or sole trader) it is possible to employ family members. This has some obvious advantages including matters of trust, reliance and such like, but providing employment and tax laws are adhered to, there may also be financial benefits. Firstly, it is generally permissible for a business …

Paying family members Read More »

Income from Family Company

Extracting income from a family company with no retained profits

The Covid-19 pandemic has had an adverse effect on millions of family companies, potentially reducing or eliminating profits. Where there is cash in the business that can be withdrawn, possibly because the business has received a Coronavirus Bounce Back Loan or a Coronavirus Business Interruption Loan, and the family need to withdraw funds to meet …

Extracting income from a family company with no retained profits Read More »

Be careful when borrowing money from your company as a director – you might fall foul of the ‘bed and breakfasting’ scenario

Directors’ loans – Beware of ‘bed and breakfasting’ It can make sense financially for directors of personal and family companies to borrow money from the company rather than from a commercial lender. Depending on when in the financial year the loan is taken out, it is possible to borrow up to £10,000 for up to …

Be careful when borrowing money from your company as a director – you might fall foul of the ‘bed and breakfasting’ scenario Read More »