The misconception
Most business owners know that when a company makes a loan to a Director that isn’t repaid within 9 months of the company year-end then HMRC imposes a tax charge of 32.5%. This is called the S455 charge.
However it doesn’t apply to all Directors, you also have to be a shareholder. It also only applies to companies who is controlled by less than 5 individuals.
Action Point
If for some reason a loan is required from the company make the loan for the person in the family who isn’t a shareholder.
