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CT600A Loans

CT600A Loans

Hi All,

I have a client who has a director loan which is done at the official interest rate given by HMRC.

I know that this means he does not have a BIK charge, but what does that mean for the normal CT600A.

Does it need to be filled in, and therefore the tax paid?

Thanks

David

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05th Sep 2011 21:52

Yes

The CT600A is nothing to do with the BIK charge.  The form must be completed for each year in which the loan is advanced or increased and the appropriate s.455 tax must be paid at 25%.

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By cfield
06th Sep 2011 17:47

Yes, but

your client can avoid the 25% tax if he repays the loan within 9 months of the year-end, which he can do by declaring a dividend and crediting it to his loan account. You then just need to complete section 2 of the CT600A.

Chris

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