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Hi all,

Just discovered that sole director has been paying himself huge directors loans (100's of thousands) over the past few years.

He has admitted that he loans from company A to Company B, which then loans to director, then from A-director & circulates the payments to avoid S455 tax.

 

The reason given is that he is avoiding paying a dividend as it would have to be split between himself & other shareholder (ex wife)

i believe a large sums have sat in his offset mortgage account for his personal property to negate an interest charge, which is the replaced by a 'loan' from other company.

my question is, what are the legalities and consequence for this.

 

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By mrme89
19th Oct 2017 10:50

Have you explained to him that this does not avoid s455 tax?

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to mrme89
19th Oct 2017 13:29

He doesn't think it seems to apply as always more that a month between repayment & new loan, plus one year loan to company b then next loan to director

Thanks (0)
19th Oct 2017 10:59

Apart from the tax issue, the consequence is that he owes the money to one of the companies.

It's never his money. He has a huge debt.

So what's his exit route ?

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to lionofludesch
19th Oct 2017 13:30

It appears that way - I have no idea of his exit route

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to mrme89
19th Oct 2017 12:32

mrme89 wrote:

A bit more to this story:

http://www.ukbusinessforums.co.uk/threads/director-refusing-to-distribut...

Nothing like being open and honest with the facts. Why do ukbusinessforums members deserve the facts and not AccountingWEB? I despair of the public's view of accountants as evidenced by the carp that you get on here these days.

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to Accountant A
19th Oct 2017 13:27

Yep this too - didn't think it was a question for accountant forum, but views on this too please

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19th Oct 2017 13:32

Am I correct to think that Any S455 tax due would show in debtor section of accounts - if so it's not been paid as I have managed to get a few full accounts

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to Tallgirl
19th Oct 2017 14:31

It would be included in debtors once paid, but not necessarily separately identifiable.

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to johngroganjga
19th Oct 2017 14:58

Definetly not there, I have a full breakdown of debtors

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19th Oct 2017 13:32

Am I correct to think that Any S455 tax due would show in debtor section of accounts - if so it's not been paid as I have managed to get a few full accounts

Thanks (0)
19th Oct 2017 13:43

Have you thought about asking HMRC for their view ?

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to lionofludesch
19th Oct 2017 15:00

I will do - just getting all info together first

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19th Oct 2017 14:31

Go see an accountant and a lawyer.

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to ireallyshouldknowthisbut
19th Oct 2017 15:00

I will do - just getting all info together first

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