Crunch time

KEY POINTS

• Loans to directors and the Companies Acts.
• The director's tax position.
• Calculating the benefit in kind.
• The company's tax position.
• When is remuneration paid to clear the loan?

Around a year ago a new phrase entered our everyday language: credit crunch. This is now heard every day: problems with the housing market and the largest inflationary increases seen for a long time evidence the current difficult economic situation.

Experienced practitioners will recognise that many director/shareholders view their own and their company's finances as being one and the same thing and this view will I suspect only become more prevalent with the current financial position of many both within their companies and their personal financial situation.

Directors have commonly 'borrowed' funds from their companies from time to time and indeed...