I have a client who is lending his company £200,00 to be repaid over 10 years. Firstly, he wants to charge the company interest ont his amount . My question is, what rate of interest can he charge - for some reason 4% sticks in my mind but a colleague thinks it 2.5%
Secondly, I have read on HMRC that if he charges the interest , 20% must be deducted and repaid as tax on interest at the end of the year by completing form CT61. So, I ssume from this then, the interest he receives isn't treated like interest on savings and forms part of his personal income to be taxed accordingly?
Sorry to sound thick but this is the first time Ive come across this situation
I have tried looking on the internet other than HMRC as that doesn't seem to give enough info.
I would appreciate any help with this
Thanking you in anticpationn