Share this content
2

Director loan interest - when start to charge?

Didn't find your answer?

Search AccountingWEB

Hi

If charging interest on an overdrawn director loan to avoid a benefit in kind, do you need to start charging interest from the date it becomes overdrawn, or the date it exceeds £10,000?

thanks

Replies (2)

Please login or register to join the discussion.

By SteLacca
01st Oct 2019 12:26

Given that the whole loan is subject to BIK in any year when it exceeds £10,000 even for a day, it would have to be charged on the full amount.

Thanks (1)
Psycho
By Wilson Philips
01st Oct 2019 13:09

What do you mean by 'charging' interest? Remember that interest needs to be paid to avoid the taxable (and NICable) benefit - merely charging it to the loan account doesn't count.

Thanks (0)
Share this content