Hi. Thank you for looking.
I am in the process of starting a franchise. I have set up a LTD company as I am also working employed for the time being and wish to keep my affairs completely separate. Also the (estimated income) from the new franchise will take me way into higher rate tax so I believe LTD company is the best way to do this.
Anyway, my questions are this. The Franchise fee is £10,000. I have paid the initial £2,000 from a bank account I set up for the LTD company in the name of the company. I transferred £2,000 from my own personal bank account to the LTD company to make the payment. The remaining £8,000 will also be done this way. On top of this I will need to transfer around an extra £3,000 from my personal account to the LTD company account in order to buy the initial stock I need and to cover 2-3 months marketing.
My questions are these :
Can I offset the £10,000 franchise fee against corporation tax. If so, would this all be offset against first years trading accounts, or would it be spread over a certain number of years ?
Secondly, the additional initial money I need to put in to buy stock and marketing, can I class this as a loan that I make to the LTD company, and then, when sufficient money built up in the future, just transfer the money back to myself and write the loan off ? There would be no interest payable. I am guessing that as it is a loan, I would not need to pay any personal tax when I get the money back ?
Any advise would be greatly appreciated, or any tips/advice on any better ways to do this.