Following the government’s Budget announcement to increase tax rates on advances, business owners and shareholders should consider paying back loans they may have received from their company, say independent chartered accountants WBV Ltd.
The move to tax loans to participators at a higher rate was announced by the Chancellor in his main speech to Parliament.
From April 2016, the rate of tax payable by a company on any balances lent by it to an individual participator or related unincorporated business will increase from 25 per cent to 32.5 per cent.