Are You Getting Your £1,000 Tax Free From Your Directors Loan?

Profit Cash Growth

Welcome to another episode of the Profit Cash Growth Podcast, the ultimate guide for six and seven-figure business owners who aim to build financially successful enterprises. In this episode, hosts Claire Hancott, a finance director, chartered accountant, and entrepreneur, dive deep into the world of director's loans and how you can potentially earn £1,000 a year tax-free from your business.

Claire and her co-host begin the episode with a light-hearted discussion about their recent mishap in booking a holiday for the wrong weekend, which led to an unexpected podcast recording session. They also share a humorous anecdote about a disappointing breakfast experience, adding a personal touch to the episode.

The episode takes a serious turn as Claire discusses a shocking news story involving Disney. A tragic incident where a woman died due to a food allergy at a Disney theme park is examined, highlighting the legal and moral complexities of terms and conditions. The hosts discuss how signing up for a Disney Plus subscription unknowingly waived the family's right to sue Disney, sparking a debate on the ethics of lengthy and complicated legal agreements.

Moving on to the main topic, Claire delves into the intricacies of director's loans, specifically focusing on how business owners can charge interest on these loans to gain tax-free benefits. She explains the concept of a director's loan in credit, where the business owes money to the director, and how interest on these loans can be tax-free up to £1,000 annually.

The episode covers the following key points:

• The importance of charging interest on director's loans.
• How to set a fair interest rate, using HMRC's base rate plus 2% as a benchmark.
• The benefits of paying interest annually to simplify tax reporting.
• Comparing the tax implications of taking money out as interest, salary, or dividends.
• How recent changes in corporation tax rates affect these calculations.

The episode concludes with a review of the movie "Tetris," available on Apple TV+. The hosts discuss the fascinating and dramatic story behind the creation and distribution of the Tetris game, including its origins in Russia and the intense legal battles over its rights. The film offers a mix of business intrigue, historical context, and personal drama, making it a must-watch for anyone interested in the intersection of technology and politics.

Don't miss this insightful episode filled with practical advice, shocking news, and entertaining reviews. If you're looking to optimise your business finances and stay informed, this episode is for you.

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ABOUT THE HOST:

Claire Hancott through Profit Cash Growth helps 6 & 7 figure business owners to increase their profit, improve their cashflow and grow their business using their numbers.

As a finance director & chartered management accountant, Claire has nearly 20 years’ experience in finance and running businesses of her own. This gives her a unique insight into the information and support business owners need to grow a financially successful business.

Claire passionately believes that every business should be run by the numbers because the numbers in your business are telling you a story about what is and isn’t working and where your opportunities lie. Claire’s mission is to provide insightful management accounts, reports and advice to business owners and support them to make smarter decisions.