Borrowing money tax free from your limited company

Remember that if you borrow up to £10,000 there is no benefit in kind.

However the company has to pay 32.5% of the value of the loan to HMRC if the loan is still outstanding more than nine months after the year end. The company then has to wait until nine months after the end of the year in which the loan is repaid to get this back.

Bed and breakfasting the loan to get round this does not work unless there is more than 30 days before or after the repayment of the previous loan or the loan is £15,000 or less and you have borrowed the money for the repayment from outside the company such as from a relative or bank.