Submitting a P11D when P35 says that none are due.
I’m currently finalising the statutory accounts for a client and it’s come to light that the director’s loan account is overdrawn by about £12k.
As no interest has been charged/paid on this it’s reportable as a benefit on the P11D however P35s for the year have been submitted stating that no P11Ds are due.
Grateful if anyone could let me know if there are likely to be any repercussions for what, with hindsight, has proved to be an erroneous statement.
As an aside I did consider advising the director to pay interest on the loan and then calculate the s419 tax payable on the grossed up balance, i.e. loan balance plus interest. However EIM26257 states that there has to be a legal obligation to pay the interest in the year for it to be taken into account. As any agreement would be drawn up “after the fact” am I correct in assuming that the retrospective charging of interest is not an option.
Grateful for you thoughts.