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Directors loan account debit balance.

One of the director has left in rather acrimonious cicrumstances and there is a 20K debit balance on DLA.

What is the correct treatment for the company.  Presumably he would have to pay tax

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30th Jul 2013 14:35

The correct treatment

... would surely be for the company to sue the former director for repayment of the £20,000.

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By BKD
30th Jul 2013 15:12

What do you mean by 'correct' treatment?

I would have thought the most appropriate treatment would be to sue him for the debt. Whether he has to pay any tax will depend on whether he is paying interest on the loan (and/or the purpose for which the money was borrowed).

EDIT - post sitting in draft while Euan posted his :)

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