Tax Query


rdp

Joined
Oct 19, 2011
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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
 
Joined
Apr 28, 2011
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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.
 

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