If I lend money to my company can I charge interest?

Shaz looks at a question from his community about the interest and tax implications of lending money to your company

There are things several things to consider in this situation around whether you will need to pay income tax on any interest and this depends on your personal situation.

You can charge interest if you want or not if you don’t, you can design and control the situation to suit you.

 

KEY TAKEAWAYS

• You don’t have to charge interest as a director you should be acting in the best interests of the company
• If charging interest isn’t the right thing to do then don’t do it
• If you do charge interest any tax is dependent on your income
• If you are a basic rate taxpayer you can have £1,000 of savings income tax-free
• If you have no income you can charge up to your personal allowance and pay no tax
• If the company is paying interest to you then it will get a tax deduction
• You can design and control the situation so that it works for you

 

BEST MOMENTS

‘There is quite a lot you can do so you don’t pay any tax on the interest personally’

‘If you want to charge interest you can and if you don’t then that’s fine’

 

VALUABLE RESOURCES

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ABOUT THE HOST

Shaz Nawaz is a serial entrepreneur; he owns five thriving businesses in diverse sectors.

Shaz is committed to helping business owners build successful businesses. Having conducted over 3,000 business growth consultation he has helped his clients generate millions in additional profits. His purpose is to inspire business owners to build businesses that are hugely profitable and sustainable.

He is a huge advocate of having multiple streams of income. He has written a number of business books and regularly contributes articles to mainstream media outlets.

You can find Shaz on:

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