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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a limited company and is VAT registered.

Resolved Question:

Hello,
I have a limited company and is VAT registered. I often have a fairly large director loan in which I charge myself 3.25% interest as per HMRC guidelines so there is no benefit in kind. I originally booked these interest payments in my accounts as 'interest'. I recently changed this to interest but under a sales category. I noticed the interest is now being included in the VAT returns. Question: Is VAT due on director loan interest?
Thanks
Michael
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

VAT is not due on the interest paid by you, the director. Take a look here for the tax implications of a director's loan.

I hope this helps but let me know if you have any further questions.

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