Making a private loan to a company
I am considering making a further loan to a close friend for her start-up business. The situation is complicated as I am sub contracting services to this company, but I will not be a direct employee, director or shareholder. I have already loaned some money directly to the limited company, which took the form of purchasing stock myself which was then invoiced to the company at cost (in my particular line of work I often come across items that are good and very cost effective as stock for my friends business, and am able to buy these for cash as generally I am buying from private individuals as I travel around in the course of my work). VAT is not an issue on the stock purchased as it was bought without VAT, and I personally am not registered for VAT either. I work as a self-employed person and do not have a limited company.
My questions are
a) would it be better to loan to the director personally than to the limited company? (risk is not an issue I am really asking from the point of view of tax efficiency, least complications in explaining things if HMRC ask questions etc)
b) how best can I ensure that any repayments of loans made or invoices paid by the company are not viewed as new income by HMRC or the CSA (as my ex has involved them in getting maintenance)?
c) Am I going to run into potential problems by buying more stock and invoicing the company in the same way, treating it as a loan, as opposed to loaning the company (or director) cash via a bank transfer?