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In the red

14 February 2012 / Kevin Read
Issue: 4341 / Categories: Comment & Analysis , tax basics , Companies , Income Tax
KEVIN READ goes back to basics with a look at corporate and income tax aspects of directors’ overdrawn loan accounts

KEY POINTS

  • The reason for the charge under CTA 2010 s 455.
  • When the liability becomes payable.
  • The obligation to disclose details on form CT600A.
  • The tax and NIC implications of a loan write-off or waiver.
  • The benefit in kind charge under ITEPA 2003 Part 3 Ch 7.

‘Are you going to cover directors’ loan accounts?’: it’s a question asked usually by several people before any lecture I give on tax issues affecting small businesses.

This reflects both the frequency with which practitioners have to deal with the matter and also the large range of issues that the topic embraces (as evidenced by its frequent appearance in the Readers’ Forum).

Where the directors have incorporated a previously unincorporated business it can be particularly difficult to get...

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