Company loans to directors
With effect from 6th April 2014 the amount that a director can borrow from their company has doubled from £5,000 to £10,000. Such a loan may be borrowed interest free or at a low rate without a tax or National Insurance charge being incurred.
This is a particularly useful source of low cost finance. The term cannot be indefinite although as long as the amount borrowed is under £10,000 a tax charge should not arise irrespective of whether the loan is paid off or not. Many companies have such loans showing on their balance sheets for many years, without tax or National Insurance liabilities arising.
If the company writes off the loan, however, then the amount written off becomes a benefit in kind and is subject to tax and National Insurance.
It should also be borne in mind that if the amount of the loan, including accrued interest, if applicable, exceeds £10,000 then the entire loan becomes subject to tax and National Insurance by the borrower – not just the balance above £10,000.
Loans to spouses or children are aggregated to test whether the £10,000 limit is exceeded. There are also additional potential tax charges where the director borrowing the money is also a company shareholder.
This article was created by --Martinc 18:44, 25 April 2014 (BST)
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
We're expanding our collaborative mission by launching DB Intelligence, an exclusive market research advisory panel. Built environment professionals can now get paid to share their expertise on industry trends, products and services.
Panel members receive direct financial incentives for participating in research projects like short surveys, 1-2-1 interviews and focus groups. Register today to shape the future of the construction sector.
Planning condition discharge in England and Wales
A brief exoplanation from a building compliance expert, with further links.
Overheating guidance and tools for building designers
Guidance for dealing with element of building fabric control that have increasing importance.
Shading for housing, a design guide
From the Good Homes Alliance and British Blind and Shutter Association.
UK Standard Skills Classification (SSC)
A shared framework for describing skills needs.
Social media ban consultation comes to close
CIOB urges UK Government to consider social media’s role in careers guidance in ban debate.
The latest of eight Skills England apprenticeship units
The addition of battery manufacturing welcomed by ECA with a warning about the risks of fast-tracked apprenticeship units.
Building Control Independent Panel final report
A precis of a key report led by Dame Hackitt with full recommendations and link to the government response.
Building Safety recap April, 2026
A short and longer run-through of the month, with links to further information and sources.
CIAT May 2026 briefing.
From medieval scribes to modern word art.
ECA welcomes crackdown on late payment and push for clean energy, whilst CIOB seek fixed cladding removal timeframes.
Cyber Security in the Built Environment
Protecting projects, data, and digital assets: A CIOB Academy TIS.
Managing competence in the built environment
ITFG publishes new industry guide on how to meet the ICC principles.
The UK's campaign to reduce noise pollution: Mythbusting, articles and topic guides.