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when is the time limit you refer to too, on the payback, ideally I would want to pay back over say over 10 years I presume this would not make sense to do so..i basically want to use the company cash to pay off a mortage on a premises I own, so I can receive the month income from it.., without the larger mortgage payment. And free up some cash per month. But not use my own...im already paying 33/40 tax on income/directors dividends plus other income....would this additional taxation be personnel or company..thanks
If a loan to a director is not repaid within nine months and one day of the end of the accounting period during which it was taken out, the company will have to pay a one off Section 455 tax charge at 25% of the outstanding balance along with its regular corporation tax liability.Look under the heading "Reclaiming Corporation Tax after your director’s loan has been repaid" here for information on claiming repayment of the Section 455 tax charge.As far as your personal tax situation is concerned, you will have to pay tax on a benefit in kind annually if the loan or the totla of all loans outstanding is for £10,000 or more which you can read about here and you pay interest to outstanding he company at below the official rate which is currently 3.25%.The company will also have to report the loan on a form P11D and pay Class 1 NIC on the taxable benefit annually at 13.8%.