Loan written off: are you in HMRC’s crosshairs?
HMRC is writing to directors that took a loan from their company that was later written off or released. What should you do if you receive a letter?
The letters are being sent to taxpayers who:
- had a director’s loan that was written off or released between April 2019 and April 2023; and
- did not declare the amount as income on their self-assessment tax return.
The amount released or written off is treated as an income distribution and is taxable at the appropriate dividend rates. If you do need to pay extra tax you can tell HMRC by using the digital disclosure service. This service can be used even if the loan was written off or released before April 2019, but for loans released or written off since 6 April 2023, you can simply amend your tax return to reflect the additional income.
Related Topics
-
P46 (car) submission deadline
-
Deadline to file paper self-assessment returns
-
MONTHLY FOCUS: TAX PLANNING FOR MARRIED COUPLES (TRADERS AND COMPANIES)
Married couples have been taxed separately rather than as a unit since 1990. There are a number of strategies married couples (and civil partners) can adopt to save tax. This Monthly Focus looks at business-related income planning.
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.