Director's loan account record
A taxable benefit in kind may arise where a director is provided with a loan, either interest free or at a rate of interest below HMRC’s official rate. Use this document to calculate what, if anything, you need to declare to HMRC.
Make a note
Where a cheap rate or interest-free loan is no more than £10,000 at any time during a tax year, there is no taxable benefit. But where it exceeds this the whole loan is subject to the benefits tax rules. It’s therefore important to monitor loans to ensure that they don’t go over the limit, so complete a record for all loans taken out by employees and directors.
Note. All loans made to the director by the company must be added together to check whether the £10,000 limit is exceeded.
Related Topics
-
Could HMRC recategorise your subcontractors?
You use subcontractors for all your building projects and almost always the same individuals. You’ve heard that this could increase the risk of HMRC recategorising them as employees. What steps can you take to counter this?
-
Tribunal rejects reliance on adviser as reasonable excuse
A recent First-tier Tribunal decision has confirmed that relying on an accountant does not automatically amount to a reasonable excuse for missing a self-assessment deadline. The case highlights the limits of delegating tax responsibilities. What does this mean in practice?
-
HMRC issues new wave of offshore “nudge” letters
HMRC has issued a further round of “nudge” letters targeting individuals it believes may have undeclared offshore income or gains. The letters form part of HMRC’s ongoing use of data from international information exchange agreements. What should you do if you receive one?