I have a client company - providing contract services. Director's loan account is £100 000 in credit. Yes credit!!!
The company has the money in Current Account earning 0% interest!!!
The money has not been earmarked for investment. The director has been too busy to withdraw the money and invest it.
Can the company pay the director interest? and if so at what %
This will save Corporation Tax and Dividend Tax as some / all of the interest can be taken tax free. And reduces the 7.5% dividend tax too.