Tax on directors loans

Tax on directors loans

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In his last completed tax year one of my clients took too much money out of his company creating a debit balance on his directors' current accounts and paid a 25% tax charge on the balance.

This year he has managed to reduce the balance on his directors' current account. Does the tax get refunded?

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By Sheepy306
17th Nov 2015 20:20

Research
I assume that this is a new client, otherwise presumably you would have understood what you were entering on the last CT600 return.
A simple google or HMRC search will give you the answer, try CT600 loans to participators for starters.
But the answer is yes, partly., depending upon whether he has fully repaid it or partially. Your tax software will probably do the sums for you anyway.

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By Tim Vane
17th Nov 2015 23:44

HMRC won't entertain a refund until 9 months after the end of the accounting period. Get the current year return out of the way as normal, then when the time is ripe fire off a letter (or use form LP2 if you have the patience for it).

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