Ltd Company Director’s - Loaning money to the company

Ever wondered if you can lend money to your own company and charge interest?

Here's what you need to know:

🔹 Lending with interest:

As a director or individual, you can charge your company interest on loans, provided it's not excessive.

🔹 Tax considerations:

When the loan term exceeds one year, the company must deduct tax at the basic rate and pay interest net of tax. But don't worry, the company can claim Corporation Tax relief on the interest paid.

🔹 Borrowing to lend:

If you've borrowed money to lend to the company, you might be eligible for relief on the interest you pay for that loan.

📝 This 'At a Glance' guide provides essential insights into charging interest to your company.

Remember, when the company pays you interest, it must deduct tax at the basic rate and submit a return to HMRC using form CT61.