Directors Loan Account Explained! Charging Interest to Save Tax!

[@JoshuaTharby]

Have any other burning questions? Reply to this comment and I will be sure to answer!

[@moiLawUk]

The £1900 saved in corporation tax will still have to be paid once the loan is paid back or am I missing a beat? Thanks first time I've watched your channel. What are your company rates to do the accounts for a IT contractor?

[@JustSomeTheatre]

Can a CIC (limited by Guarantee) use a Directors Loan Account?

[@filamentfilms9772]

Always useful information Josh, Thankyou! PS: Nice GMT

[@JoshuaTharby]

Thank you!

[@andywall2401]

Awesome. I’m realising as a business owner I need to be aware of how a directors loan accountant works. I have realised that my accountant hasn’t made me aware of this information, so it’s down to us as individuals to ask questions and get our accountants to work for us. Andy 😮😊

[@srkaccommodationltd9242]

Brilliant tax tips Josh. 👍🏼

[@JoshuaTharby]

Thank you!

[@lawrencer25]

Fabulous video.
Very very helpful.
Thank you very much 👍👍👍🥂🎉

[@gazunkafonegazunkafone3492]

Do you ever have to pay off the DL? Or could you be in a position to only ever pay the interest? Much like other competitive loans?

[@SubyThamesGroup]

Nice video and nice Rolex Submariner 👌

[@JoshuaTharby]

Thank you!

[@SubyThamesGroup]

@@JoshuaTharby Can you do accounting for a Import and export business, I want to use profits to invest in property.
The thing is we make our money on dollars, maybe I’ll give you a ring

[@NGUYENTIEN-yk8cf]

Hi Joshua, I am not quite sure about the 1% tax bit, could you please explain it further?

[@StrykerGamingOfficial]

Although you pay 20% tax on interest income personally, your company gets a 19% corporation tax relief (since corporation tax charges 19% on profits) so the net tax you've actually paid on interest income is just 1%

[@samer1900]

I have property investment company with 20 properties and 2 million pounds capital. 1.5 millions of them are mortgage from banks and the rest 500k is my money lend to company…
i am additional tax payer at the moment from my PAYE job… so as director i dont pay myself any salary or any dividend and charge 0% on the director loan … next year i will retire and would like to get my figures right
300 k income
Expenses
80 k mortgage
25k maintenance
25k management
20 k expenses
12 k salary
38k SIPP pension
50k dividend
50k interest on director loan (10%)
The company will pay 0 cooperation tax as net profit is 0 ( income 300k minus expenses 300k)
But how much income tax i should pay on interest and how much dividend tax ? Am I consider basic or high income tax? Thank you

[@morganwhipp3098]

great advice

[@marks6721]

Great info. Thanks

[@JoshuaTharby]

No problem!

[@marks6721]

Looking forward to your book on 31st March

[@simonroberts4925]

Great video. If I loan my company funds but I am an employed PAYE higher rate tax payer. Can I let the interest on my loan compound indefinitely? Looking to draw the loan back when I retire in 5 years time.

[@roymichaeldeanable]

I also plan on doing the same...leave the Interest with the company

[@EddieGittins]

If a Ltd Company owes the director a sum of money say £100k for start up. is tax paid when it starts to make a profit. say a balance of over £100k

[@chrismolloy3295]

Hi Joshua.
I wish to pay in 100k into my start up ltd company from my personal bank account to buy a BTL property outright and charge no interest. I understand the loan is repayable to me from the company both corporation tax free and income tax free as there is no interest. This would be paid by the incoming rent on the property until the original 100k loan is repeated (years) Am I correct?
Thanks
Chris

[@krisjenkins4167]

Can you alter the interest rate you charge the company? Or does it have to be 1 rate forever?
I am lending my ltd company 173k, which i had from a personal mortgage.

[@menhelisg]

If I understand correctly, as long as you’re under the basic rate income tax threshold personally, you can claim back the 20% tax paid by the company (via CT61) on the director loan interest in the self assessment tax return. Is my understanding correct? If so, which section does it go in?

[@roymichaeldeanable]

HMRC are happy with 7/8%....

[@Jeffybonbon]

I have directors loans which i have given the company to use as BTL deposits and I think I am correct in saying when the company pays me back the loans to me corporation tax is paid by the company its a bit like a capital and repayment Mortgage

[@JoshuaTharby]

The company will pay all the corporation tax and what's left can be used to repay the loan. The interest is a tax deductible.

[@Jeffybonbon]

@@JoshuaTharby thats what i am saying its not tax free deal as some directors think

[@moiLawUk]

The £1900 saved in corporation tax will still have to be paid once the loan is paid back or am I missing a beat? Thanks