An overdrawn director's loan account was written off at the end of the accounting year. What are the accounting disclosures?
The company is small and does not have an audit. The amount involved is immaterial.
How should this be treated/described in the statutory accounts and in the detailed p&l account?
Thanks
Andrew
Replies (3)
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Directors loan
Personally I would post it to bad debts and include it in the related party transaction note to the accounts.
Thanks Phillip
I think I'm ok on the tax consequences. I just wondered if there was any requirement for disclosure?
Directors bad debt!
Surely an overdrawn loan account must represent a bad debt in the P & L account albeit from the director. I do not think tax relief will be due. What about S419 tax and the relevant benefits in kind?