Barclaycard Business

Terry_Towelling

I understand the MT card debt will be interest free and why you want to do this, but the MT debt will be a personal debt in your name (as opposed to the business' name) and you will have to repay your MT card debt out of your own personal cash.

My thinking was that your business should pay you back for the loan you are effectively making to it so that you can then repay the MT debt (in your personal name). It's all about keeping your business affairs separate to your personal affairs.

I was musing that you could ask your business to pay you interest on the loan you are effectively making to it. That might be a tax-efficient way of extracting value from the business (I'm guessing) - hence why I suggested engaging with an accountant who could give proper advice on the way to handle it. (I'm not an accountant - as is probably obvious by now).

From what you appear to be saying your business and personal finances may become entangled and if you just use business cash to pay your personal MT debt without going through some intermediary process (i.e. the loan scenario) that might be viewed by HMRC as paying yourself more potentially taxable income.

NB - as I say I'm not an accountant but it seems sensible to keep business and personal debts separate and to create a scenario that formalises the arrangements of your planned cash injection. If there are any accountants reading who think this is not necessary, I'm happy to be put in my place and to learn from it.

Terry_Towelling

Robin9 wrote: »

Are you sure you can operate a BUSINESS account - I thought Money Transfer cards were solely domestic.

Yes, I think you are right, but you can do what you like with money in your own name (within reason). My thoughts are that using a source of personal cash to fund a business expense is mixing things up and it needs to be formalised as a loan to the business (one that needs to be repaid to you by the business).

ridingwood

Well as we are only drawing around £20 per week to live on ATM paying the Barclaycard is the most important thing as the interest is mounting!

Terry_Towelling

ridingwood wrote: »

Well as we are only drawing around £20 per week to live on ATM paying the Barclaycard is the most important thing as the interest is mounting!

Yes, I know and that's exactly what you'd be doing. You would be lending money to the business to pay the Barclaycard. The business then repays you for the money you have loaned to it. Instead of drawing an income (that may be taxable) you get the same value out of the business in the form loan interest (that may not be taxable). You still end up with your £20 per week, your Barclaycard gets paid and you are able to service the debt now sitting on your PERSONAL Money transfer Card.

Of course the money extracted from the business under my suggestion may still be taxable which is why it needs to be run past a proper accountant.

I think you are not understanding the angle I am trying to exploit. I will leave it there.

ridingwood

Hi Terry Towel
Quick update, I spoke Barclaycard who have frozen the interest for 3 months to give us a chance.
As for the taxation thing we are under the tax threshold
Hope this helps
Thanks