• SAGE


0161 928 3276



We understand our clients

A Loan From Your Own Company

Newsletter issue - July 07.

If you want to borrow some funds temporarily from your own company, there is not much in practice that will prevent you from doing this.

However, company law prohibits a company of any size from making loans to its directors, unless those funds are needed by the director to pay expenses incurred on behalf of the company, or to allow the director to perform his duties as a director. The loan must also be approved by the shareholders in a general meeting and be repaid within six months of that meeting. There is a general exemption from these conditions where the amount of the loan does not exceed £5,000.

So you can borrow up to £5,000, but you also need to think about the tax consequences however much you actually borrow. If you do not repay the loan within nine months of the company's year end, the company will have to pay an extra corporation tax charge equivalent to 25% of the loan. That charge will be set-off against the next corporation tax payment due after you finally repay the loan.

When you borrow more than £5,000 there will also be a benefit in kind tax charge due from you personally, if you do not pay interest on the loan of at least 6.25%. This tax charge applies however long you borrow the funds for: 5 months or 5 years.


To work Smarter in your Business Contact Beauchamp Charles

Contact Us

"Join our newsletter for hints, tips and tax advice"


What our clients say

Dakins Property Services

Great Results, Personable, High Integrity

Choice Events Limited

All at Beauchamp Charles are very helpful, approachable and easy to talk to. They keep me informed with key dates; I can feel totally confident that I won't ever miss any deadlines! Whoever I deal with, always deal with matters professionally and efficiently and if they are unavailable they get back to me promptly.

FT leisure Ltd

I have worked with Beauchamp Charles as our management accountants for over 20 years and have never received anything less than exceptional service. Their approach is both professional and personal. Finances and particularly tax strategies are a minefield for small businesses; Beauchamp Charles have in-depth knowledge of these area, which is comforting. They pay very close attention to our business activities and have provided financial strategies that have helped our company develop.

Fredrick Thomas Electrical and Maintenance

We have used Beauchamp Charles since company formation back in 1998. Beauchamp Charles offers us a one to one service as they are small enough to offer this dedicated service and large enough to do the work and offer best advice. They get to know us as individuals and a business, always giving sound advice. Frederick Thomas Electrical are in a stronger place thanks to the service we get from them.

Barnes Walker Landscapes Limited

We are a small business and had employed the same accountancy firm for many years. Two years ago we took the decision to switch to Beauchamp Charles after several othe local businesses recommended them very highly to us. We have not been disappointed with the service they have provided to us over these last two years.