Management charges and intercompany loans are simple in theory but easy to get wrong on paper. We'll help you set them up so they're deductible, defensible and HMRC-ready.
Once you run more than one company under a holding company, money inevitably needs to move around the group. One company employs the shared staff, another owns the premises, a third is funding a brand-new venture. Two tools do almost all of this work: the management charge (one company invoices another for services it has provided) and the intercompany loan (one company lends another cash).
Both are completely legitimate and used by groups every day. The catch is that HMRC expects them to be genuine, commercial and properly documented. Get the paperwork right and the charges are deductible and the loans are clean; get it wrong and you can lose the deduction, trip a VAT problem, or create a tax charge you never expected. This guide explains both, in plain English, as part of our wider group structures guide.
In a typical group, costs and cash rarely line up neatly with the company that benefits from them. There are three common reasons money needs to move: