If you are a company manager and you lend/borrow money to your company, you need to consider the repercussions.
By taking money from your company, you create a debit current account, which means you owe a debt to your company. In this case, an interest rate is calculated and applied to this amount at the balance sheet date. The amount calculated becomes a taxable benefit in kind for you.
The interest rate changes every year. Here’s an overview of the rates.
Interest rate C/C debit
Tax year 2023: 7.14%.
Taxation year 2024: 5.43%.
Tax year 2025: 6.25%.
By lending money to your company, you create a current account in credit, which means that your company owes you a debt. In this case, it is possible to apply interest in your favor on the amount at the closing date and according to a calculation. You will have to pay 30% withholding tax on this gross amount with the company and you will be able to withdraw the net amount.
The interest rate changes every year. Below is an overview of rates.
Interest rate C/C credit
Taxation year 2023: 4.07%.
Tax year 2024: 5.70%.
Tax year 2025: 8.02%.