How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask taxadvisor.uk Your Own Question
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

I have business a) with 12k of debt. I have another business

Resolved Question:

I have business a) with 12k of debt.
I have another business b) that is 12k in credit.
I want to prop up a with funds from b, what is the most tax efficient way of doing so? Pay myself a dividend from b and then pay that into a?
Or, should I just have a invoice b?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.Do you have retained earnings in company b in excess of £12kAre you a higher rate tax payerAre funds needed in company A short termMany thanks
Customer: replied 1 year ago.
Company B is only 3 months old, so far have only drawn £600 from it.I draw a salary and dividend from company A of around 45k p/a so yes, higher rate tax payer.No, I plan to keep the funds within company a long term, if not permanently. (Essentially, company a has been my sole source of income for 3 years - poor trading last year meant that I didn't have funds to pay the 10k corp tax liability in Nov + the 2k VAT due now.Needing money, I took a job from an employment agency who insisted I bill them through a company and so I started company b - b has earned enough to offset a's debts. Hope this makes sense :)
Customer: replied 1 year ago.
If it helps, company (b) will earn 70k p/acompany (a) ran at a 10k loss last year on a turnover of 110k, this year, who knows.... probably lucky to turn over 60k but at least I'll not be drawing out from it as I plan to rely on company (b).
Expert:  taxadvisor.uk replied 1 year ago.
You could consider giving company a a loan from company b at Thank you for your reply. If you can raise an invoice from Company A for management time, then income in Company A would be subject to CT. You could also consider a short/medium term loan from company b to a on commercial terms. The loan sits within balance sheet and does not affect profit and therefore no tax implications. I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
That's brilliant, thanks for your help and advice, much appreciated.
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes.