Turning BBX into cash with a directors loan

Most business owners run a directors loan account to draw money from the business. Because a BBX pound is accounted for the same as a sterling pound, when you sell a personally owned item through the BBX network the BBX pounds generated can be credited against your Directors Loan account. Therefore allowing you to draw down the same amount in cash or reducing the loan owed by the director mitigating the associated tax that would have incurred if the loan had not been paid back.

As an example you may see the odd car sold on BBX. One BBX client had a directors loan of £8K that needed to be repaid back. They had a car that at the high end was valued at £8K but to get a quick sale would have to sell for £6K. They sold the car on BBX crediting their account with £8K BBX absolving them of their directors loan which they otherwise would have needed to pay additional corporation tax of £2.7K (33.75%) of tax unless the loan was repaid in full. The £8K BBX was spent on a marketing campaign to promote the business, this spend also generated a VAT reclaim of £1,333.33.

The net result was £2,600 saved on tax plus £1,333 claimed back on VAT.

In addition the business received £6,666.66 in advertising to drive cash business through the door.

Please note: We advise discussing any accounting manners with an accountant (there are plenty on BBX).

Need further explanation or you would like to know how to implement in your business? Call your account manager on 0333 400 2014 or request a call back below.