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Director loan interest - when start to charge?

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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?


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By SteveHa
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.

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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.

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