Hi, I was due to pay interest on my directors loan account balance at 25% as part of last years tax which I did not pay. Does that mean I incur another years worth of interest this year as it was not paid nor was the loan paid off? Thanks
Hi.There is only one tax Section 455 CTA 2010 charge of 25% but if the overdrawn balance has increased compared to the previous year, then there may be a 25% tax charge on the increase. HMRC will charge interest on any Section 455 tax paid late.Take a look here for information on directors loan accounts.I hope this helps but let me know if you have any further questions.
No the overdrawn balance is still the same - so its a one off payment of interest for the year the loan was incurred correct? Do you know approximately the rate of interest charged on the late payment?