Directors loan account (overdrawn)

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monkeypuzzle47
monkeypuzzle47 Registered Posts: 134 Dedicated contributor 🦉
in General accounting discussion
Can someone please remind me what amount is acceptable for the directors loan account to be overdrawn at year end without having to pay the extra tax. I believe its up to 10k. Please advise. Thank you.

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  • CeeJaySix
    CeeJaySix Registered Posts: 645
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    If by extra tax you mean s455, I don't believe there is a de minimis limit (unless they work full time for the company, borrow less than £15k, and do not have a material interest in the company (in broad terms control less than 5% of the share capital)). You may like to have a scan of s455 - 458 CTA 2010.

    If you mean the BIK limit, that is £10k from 14/15 onwards; if you're over it and not paying interest/below HMRC's 'market rate' interest there will be a personal tax and Class 1A charge.

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