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Posted Wed, 08 Nov 2023 13:04:52 GMT by
Hello, I was wondering if an LTD company lends money to its director that exceeds 10 000 GBP, but there will be interest paid on that loan by director and that interest will be more than current "Average official rate" (so it wouldn't be low-interest or no interest loan), should the company submit P11D for that loan? In other words, if there will be no cash equivalent of the benefit, should the company submit the P11D form nevertheless?
Posted Fri, 10 Nov 2023 11:07:52 GMT by HMRC Admin 20
Hi mgr.kamil,
Generally, where an employee/director is given a loan over £10,000 and interest is calculated at or above HMRC's official interest rate, then there is no benefit to report.
However, if the loan is provided via the director's loan account and it is overdrawn (where the director has taken money out of the company that is not classed as dividend or salary and the figure exceeds any money they have put into the company) then the director will be deemed to be benefitting from a director's loan. If the loan exceeds £10,000 at any time in the tax year, then a benefit in kind has to be calculated on the P11D form.
Expenses and benefits: loans provided to employees
Thank you.
Posted Mon, 13 Nov 2023 08:57:49 GMT by
Hi, thank you kindly for your response. I have only one more question. When a loan is provided via the director's loan account, and it is overdrawn - does P11D have to be submitted, even if the director pays to company interest, calculated on that loan?
Posted Wed, 15 Nov 2023 15:15:29 GMT by HMRC Admin 19
Hi,

An overdrawn director’s loan account is where the director has taken money out of the company that is not classed as a dividend or salary and the figure exceeds any money he/she has put into the company. At this point, the director will be deemed to be benefitting from a director’s loan. If the loan exceeds £10,000 at any time in the year then a benefit in kind has to be calculated on the director’s form P11D.  

If you are unsure whether you should treat the loan as earnings or a beneficial loan, you would need to contact our Corporation Tax team.

Corporation Tax: general enquiries

Thank you.

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