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P11d quick query

P11d quick query

Dear All,  I'd like your view on the following....

Directors loan account, starts year in credit -2k as at 05/04/09.  A series of withdrawals is made against the account so I have treated them as a single loan, the value of which steadily increases during the year to an overdrawn balance of +£6 in mid Nov.  The closing balance is +£15k by 05/04/10.

My question...do I calculate the cash equivalent starting as at +6k in mid Nov, and calculate the benefit over 5months? Pior to this the loan account balance was either in credit or steadily rising below the £5000 limit.

Sorry if its a daft question, but it looks odd when I'm coimpleting the P11d


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By PennyC
05th Jul 2010 16:11

The answer

Because the loan exceeded £5k at some point in the tax year you need to consider all periods during which it was overdrawn, even by 1p. So the starting point is to establish when it first went overdrawn.

But you should check to see if the daily basis gives a lower figure than the average basis (not that it will affect the P11D, which must use the average basis, but can be elected by the director for his own return).

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05th Jul 2010 16:19

Thanks Pennyc

The loan account jumps from a credit balance of -300 to +1500 overdrawn on the 27th August.  So I'll apply the benefit calculation from this point in time.  Thanks for the quick reply

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