Northampton accountants Harris & Co review the proposed changes in company loan legislation, and how it will affect owner managed companies.
Draft legislation has been published which confirms an announcement made in the 2013 Budget, and which has come into effect as of March 20th 2013.
A close company (which generally includes an owner managed company), may be charged tax in certain circumstances where a loan or advance has been made to individuals who have an interest or shares in the company (known as participators). This will include loans and advances made to an associate of the individual, such as a family member.
At present, the corporation tax charge is 25% where the loan is outstanding nine months after the end of the accounting period.
The new law will prevent companies avoiding payment of the tax charge by repaying the loan before the tax is due (nine months after the end of the accounting period), and then effectively withdrawing the same money shortly after. This change may also prevent refunds of the 25% tax already paid where loans were withdrawn shortly after.
Northampton Accountants Are Happy To Help
This change may affect a number of owner managed companies. Located in Northampton accountants Harris & Co will be happy to discuss how your business will be affected by the changes. Experts in corporate finance, we can advise you on all areas of accounting, compliancy and business growth.
For more information about the services we provide, call our team of Northampton based accountants on 01604 660661 or email firstname.lastname@example.org.