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declaring tax on DLA on abbreviated return

 I have a client that has a genuine director's loan account - i.e.borrowed more than he made in profit. His accounts are due tomorrow and I wanted to check if the tax due on the DLA needs to be included in the tax figure declared to Companies House or is it just declared on the CT600. Any assistance would be appreciated.

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30th Dec 2010 15:18

Advances to directors

Hi Mitzra

Yes the ACT needs to be disclosed as a corporation tax liability and as a deferred tax asset.

There should be a note in the abb and full accounts disclosing the advance made to the director, the terms, any security, interest rate and repayment details

Regards

Louise

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By mitzra
30th Dec 2010 15:23

Thanks

 Thanks Louise, I do appreciate your quick response. I had an incling this was the case but just didn't want to do it without checking, in my pre-new year panic. 

HAPPY NEW YEAR

Marion

 

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30th Dec 2010 15:25

Eh?

You don't declare tax figures to Companies House - you file accounts, presumably for the year ended 31st March 2010 if they are due for filing tomorrow.  The balance sheet included in those (abbreviated) accounts should set out the company's position at 31st March 2010.  If it had a loan to a director included under Debtors, which has not been repaid since then, it also had a liability for the 25% tax charge under s.455 which must be included under Creditors.

The only point in doubt is what you do with the DR entry for the s.455 tax.  Do you charge it to the P&L or include it under Debtors (not due within 1 year) on the grounds that it will be recoverable at some time in the future when the loan is repaid or written off.  This has been debated at length on AWeb in the past.  I belong to the "charge it to the P&L" school as I do not think the recovery should be recognised until the year in which the loan is actually repaid.

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30th Dec 2010 15:26

Happy New Year to You too Marion

 

Regards

 

Louise

 

 

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By mitzra
30th Dec 2010 19:50

Thanks

Hi Euan,

Thanks for the clarification. This is only for a small amount so hopefully including it as a creditors will be acceptable and it will be paid off very soon.

Marion

 

 

 

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