Call for Assistance: 02033 259 341
Spondoo Accounting
Call for Assistance: 02033 259 341
Spondoo Accounting

Can my limited company loan money to another limited company owned by me or a family member?

May 29, 2023

In short, the answer is yes.

Yes, your limited company can indeed loan money to another limited company owned by you or a family member.

From a legal standpoint, the director of the lending company must ensure that the business has sufficient funds to provide the loan without jeopardizing its own financial stability.

From a tax perspective, it is necessary to establish a loan agreement between the two businesses, ensuring that the interest charged reflects a fair and arm’s length lending transaction. The lending company will be required to pay corporation tax on any interest payments received, while the receiving company can claim tax relief on the interest payments made towards servicing the loan.

It is crucial to ensure that the loan is used by the receiving company for legitimate trading purposes and not for personal payments to you or your family members as directors or shareholders of the receiving company. This is to avoid being subject to the ‘s455’ anti-avoidance rules as failure to comply may result in the imposition of a director’s loan charge on the payment.

More information on reclaiming the section 455 director’s loan charge can be found on this link.

“Have questions or need further assistance? Reach out to us!”

more tips

Can You Claim Food as a Business Expense?

The golden rule when claiming business expenses is that the cost must be “wholly and exclusively” for business purposes. So, where do you stand when it comes to food and drink? After all, everyone needs these things to survive. When does it become an allowable expense? Read on to find out when your business can claim food and drink as an expense.

Self-Employed National Insurance Class 2 and Class 4 Rates

If you are sixteen and over, self-employed (sole trader or in a partnership) and making a profit befitting the ‘small profits threshold’, you are liable to pay national insurance.

Key UK Personal Tax Year Dates & Deadlines 2021/2022

Are deadlines creeping up on you? Spondoo is here to ensure you keep on top of things and take control again. These are the important dates you should take note of.

How To Set Up A Limited Company 

A Step-by-Step Guide  This is an easy-to-understand, step-by-step guide, to opening a successful limited company. But before we dive in, let’s check the legality surrounding it. 

Accountants in Haslemere, Surrey

We are qualified accountants providing personal and professional services for start-ups, established companies and individuals in and around the Halsemere area in Surrey. With the rise in technology, we have embraced the digitisation of accounting using efficient digital accounting tools to offer reliable services to our customers. Our goal remains to get our clients the best accounting and taxation services at the most affordable rates.

Onsite Canteen and Lunch Vouchers - Are They Taxable?

The provision of food and drink to an employee by their employer is a lovely thing to do. Eventually, it promotes teamwork, loyalty, a sense of belonging and even improves productivity. Taking it at face value makes it look like a simple act of kindness. However, unless it is done correctly, it can cause tax and national insurance compliance issues for the employer.
1 2 3 40
Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
© Copyright 2023 - Spondoo - All Rights Reserved
How, can we help?
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram