Transferring money from Limited company account to sole trader account for less than two months to blacken an over draft. Details about it:
1. Done during the same financial year. So no directors loan disclosure needed?
2. Done during quarter between p30 payments. So no income tax to be paid as loan from the company to sole trader account is repaid before p30 due.
3. Money is still available to the company to draw on if needed .... issue it is residing in an account not owned by the company.
4. History of the sole trader account making loans to the limited company where the company needed additional injection of cash temporarily. The company has repaid all these loans to the sole trader account.
5. Both sole trader and company in existence for years. No change this year just delay in contracts being paid due to delay in invoices being sent out.
Questions: As long as the money is repaid within two months is there an implication?
If money is not repaid within two months then money becomes salary payment to directors and tax is paid in the next p30.
Rather than someone say this is not allowed please explain why you believe this not to be allowed. I contacted revenue about it and they were not clear. They did give an example that if money was transferred in error from the company and then repaid by the director within 3 months then there is no issue.
1. Done during the same financial year. So no directors loan disclosure needed?
2. Done during quarter between p30 payments. So no income tax to be paid as loan from the company to sole trader account is repaid before p30 due.
3. Money is still available to the company to draw on if needed .... issue it is residing in an account not owned by the company.
4. History of the sole trader account making loans to the limited company where the company needed additional injection of cash temporarily. The company has repaid all these loans to the sole trader account.
5. Both sole trader and company in existence for years. No change this year just delay in contracts being paid due to delay in invoices being sent out.
Questions: As long as the money is repaid within two months is there an implication?
If money is not repaid within two months then money becomes salary payment to directors and tax is paid in the next p30.
Rather than someone say this is not allowed please explain why you believe this not to be allowed. I contacted revenue about it and they were not clear. They did give an example that if money was transferred in error from the company and then repaid by the director within 3 months then there is no issue.