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Definitive Answer to Companies Paying Interest on Loans CT61

Definitive Answer to Companies Paying Interest...

Didn't find your answer?

Posted on another thread but seems to have disappeared!

Anyway my reading is that the requirement for deducting tax from interest on a loan to a Company and reporting on a quarterly CT61 is not dieing in April?

Banks and Building Societies will pay gross. But they will report the interest paid to HMRC I think so the persons tax code can be amended for the actual interest paid in following year's I think (anyone figured out how this is going to work? chaos I think?!).

So my take is that interest is still paid net, and the recipient needs to do a tax return?!

Cheers

Rob

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By Lship
14th Mar 2016 09:55

Very much correct, CT61 are still required for interest payments!

And a tax return will be required to reclaim any tax deducted.

 

As a side note, it is now possible to get £21k out of your company tax free.

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By roblpm
14th Mar 2016 10:02

But dividend tax is going to outweigh that??

Lship wrote:

Very much correct, CT61 are still required for interest payments!

And a tax return will be required to reclaim any tax deducted.

 

As a side note, it is now possible to get £21k out of your company tax free.

Sure, but I think director/shareholders on 40k are going to be unhappy when they get their tax bill for January 2018??!

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By Lship
14th Mar 2016 10:21

Depends on the exact figures and how you sell it, still possible to be slightly better off even with £40k director. Its all about the income split, and comparing it to the traditional salary/dividend approach.

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By roblpm
14th Mar 2016 10:39

Mysterious..................

So are you going to spill an example??!!

Compared to (rough figures as I am in MacDonalds!):

Salary £8060

Net Dividends £30,900

Company Pension Contribution £40,000

Times two for husband and wife companies.

No Personal Tax.

 

 

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