Temporary loan to company

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sinbadsailor

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I am selling a private car and buying a commercial through my business on HP.
I will need to give the VAT value up front to the bank on the finance deal and was wondering would there be much of a problem in me loaning the private sale amount to the company to pay this and then paying myself back when the rebate from VAT return comes back in April?

Is there anything dodgy about how this will look from a corporate enforcement point of view? We're talking 4-5 weeks of a loan?
 
Loans BY a director TO the company are not generally a problem. Once the director can show ( if ever required) where he/she go the funds to loan to the company. The repayment by the company to the director of the loan is not a problem either. Just make sure that (a) the lodgment and (b) the repayment are clearly separately identified in the records for accounting purposes.

Loans BY a company TO directors are a different matter and there are strict company laws in relation to those.
 
sinbadsailor said:
I am selling a private car and buying a commercial through my business on HP.
I will need to give the VAT value up front to the bank on the finance deal and was wondering would there be much of a problem in me loaning the private sale amount to the company to pay this and then paying myself back when the rebate from VAT return comes back in April?
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Have you looked into the relative merits of you buying the vehicle as against the company doing so? The former option is usually more tax-efficient.
 
ubiquitous said:
Have you looked into the relative merits of you buying the vehicle as against the company doing so? The former option is usually more tax-efficient.
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When it's a commercial as against a regular passenger vehicle, with the lower 5% BIK and VAT and CT write offs, would that not still be better than the director buying and charging mileage?
 
Graham_07 said:
When it's a commercial as against a regular passenger vehicle, with the lower 5% BIK and VAT and CT write offs, would that not still be better than the director buying and charging mileage?
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That is precisely what the OP should find out, by reference to their own situation, mileage profile etc.
 
Thats exactly why I am doing it guys, the revenue has deemed the majority of mileage as 'to and from work' in my case, which of course is not allowable. I don't agree with them that work is the location of the contract and not my registered business premises at home but thats what they said!

Therefore I am paying for running of car from after tax wages with very little comeback. Hence the change to tax efficient commercial through the business
 
This has a bit more information which might be helpful on the commercial bik issue.

[broken link removed]
 
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