Tax Query

Discussion in 'UK Accountancy' started by rdp, Oct 19, 2011.

  1. rdp

    rdp

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    Hi - first post so take it easy on me!!

    Back in June I started up my own consultancy business, and in doing so injected £1000 capital from my own savings in order to assist with general cash flow in the early stages. The business is now doing well, and I would like to withdraw that £1000 from the business to put back into my savings. Would I have to pay income tax on the £1000 if I were to withdraw it?

    Any advice would be much appreciated.

    Thanks

    Rob
     
    rdp, Oct 19, 2011
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  2. rdp

    Robert Pearce

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    No, you won't be taxed on the repayment of the £1,000 as it's not income.

    If you're a sole trader, you're only liable to income tax on the profits of the business. Taking money from the business is ignored for tax purposes - the £1,000 repayment will be shown as drawings.

    If you trade through a company, then the repayment will be a director's loan repayment.
     
    Robert Pearce, Oct 20, 2011
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  3. rdp

    rdp

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    Thank you for your help
     
    rdp, Oct 20, 2011
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