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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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If I pay interest at a commercial rate does the loan still

Customer Question

If I pay interest at a commercial rate does the loan still have to be reported on [email protected]
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. The fact that you pay interest at a commercial rate on a director loan affects only your personal tax liability and the company's Class 1 A National Insurance Contribution liability on the benefit in kind. It has to be reported in the CT600 regardless of the interest you pay unless its is repaid within 9 months and 1 day of the end of the accounting period in which it was taken out. It it isn't repaid by then, a Section 455 charge will be payable. There is more information here: http://www.rossmartin.co.uk/companies/checklists/489-directors-loan-account-toolkit I hope this helps but let me know if you have any further questions.