Tax is changing, George Osborne seems to be getting busier the longer he is chancellor. In recent years there has been no need to pay interest on money directors/shareholders might lend their company because paying dividends was, for tax just as effective. So why further complicate your payments by having additional sources of income? What has changed?:
- The first £1,000 of interest will be tax free.
- Interest is not subject to dividend tax.
These two changes mean it will be tax effective to pay yourself interest on the money you lend your business. I won’t make you rich, but as they say, every little helps.