Replies to Queries - 1

Our client runs a small business through a limited company. The company tends to pay a dividend at the end of each year rather than a salary there being no IR35 issues.

The company can hold bank balances of up to £20 000 at any one time. As the interest rates available to the company are pitifully low compared with what is available on comparable personal accounts our client is considering temporarily extracting the cash and depositing it in a personal account on behalf of the company - the client will be effectively a trustee of the company's money.

However our client is concerned about the income tax that will be deducted from the account and whether it is recoverable. Another issue we have raised is the legislation on beneficial loans (section 160 Taxes Act 1988) and loans to participators (section 419 ...