Using bounce back loan to repay personal credit cards

Belfast27

Hesel18 said:

This is copied from Martins article on BBL scheme, I think a lot of the posters on here have missed the point you are a sole trader and are advising as though you are a business:
Sole traders / business owners: You can take cash from the business, quite simply because you are the business. And taking the money doesn't trigger any tax, because you pay that based on profit not withdrawals. Then again, of course, as this loan is your loan, you're liable to repay it.

Therefore Martin saying that the BBL isn’t taxable?? Although intended solely for business purposes, would it not be exemp from income tax given the fact you’re paying it and not simply acquiring it permanently as a grant?

justwhat

Therefore Martin saying that the BBL isn’t taxable?? Although intended solely for business purposes, would it not be exemp from income tax given the fact you’re paying it and not simply acquiring it permanently as a grant?

The grants are taxable if it becomes profit. Income tax is due on earnings/withdrawals. 
The loan is a little different as its a debt. And it has to be paid back. 

Jeremy535897

justwhat said:

Therefore Martin saying that the BBL isn’t taxable?? Although intended solely for business purposes, would it not be exemp from income tax given the fact you’re paying it and not simply acquiring it permanently as a grant?

The grants are taxable if it becomes profit. Income tax is due on earnings/withdrawals. 
The loan is a little different as its a debt. And it has to be paid back. 

I think this may be confusing tax liability with universal credit reporting. To be clear:
The self employed grant is income for tax purposes and will be treated as a receipt of the self employed trade. It counts as income for universal credit in the assessment period it is received.
A bounce back loan is not taxable because it is not an income receipt. Nor is it income for universal credit, and it is disregarded as capital. Repayments of the capital balance of the loan are not deductible for tax and are not expenses for universal credit. Interest payable (when the interest free year has expired) will normally be an expense allowable for tax purposes, and an expense for universal credit.

justwhat

Jeremy535897 said:

justwhat said:

Therefore Martin saying that the BBL isn’t taxable?? Although intended solely for business purposes, would it not be exemp from income tax given the fact you’re paying it and not simply acquiring it permanently as a grant?

The grants are taxable if it becomes profit. Income tax is due on earnings/withdrawals. 
The loan is a little different as its a debt. And it has to be paid back. 

I think this may be confusing tax liability with universal credit reporting. To be clear:
The self employed grant is income for tax purposes and will be treated as a receipt of the self employed trade. It counts as income for universal credit in the assessment period it is received.

Sorry i was trying to point out there may never be any tax due on the grant for various reasons. Tax threshold etc

Jeremy535897

Yes that may well be the case.