VAT - Inter company transactions

Nickynoo Registered Posts: 34 Epic contributor 🐘
Please help someone, . . .

Is VAT charged on inter company loans? basically there are 2 directors for one company for whom I do the accounts and one of these directors has 3 other companies running out of the same office, due to cash flow of the company with 2 directors the director with the additional 3 will borrow from one of his other and lend to the company with the 2 directors??? are these transactions vat able?

Thanks any one who can advise x


  • CeeJaySix
    CeeJaySix Registered Posts: 645
    This is an informed guess rather than authoritative answer, but I've not come across VAT being charged and can't see why it would be. A loan is a loan regardless of its source, you wouldn't pay VAT on a bank loan. There's no sales or purchases of goods or services, so where would the VAT be charged and what would it be charged on? On the other hand there could be corporation tax implications. Is the loan set up as a loan between the companies or has the director done it through his DLAs?

    Again, I don't know this, I'm just working from my very limited experience. Of course if I'm way off the mark someone please correct me.
  • Nickynoo
    Nickynoo Registered Posts: 34 Epic contributor 🐘
    Hi thank you for your reply, I couldn't see that there would be a VAT charge either. I have been in this role for almost a year and this area of things confuses me mainly due to the DLA which would be fine if it was straight forward, unfortunately I am expected to know everything about everything and have the accounts all up to date with an ever growing work load (job title accounts - actually do the works co-ordinating, admin, customer services and accounts) and little support . . . . . thinking of a new job where I receive more accounts role.

    I just needed reassurance in my thinking :001_smile:
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