I'm having trouble getting my head around the Director's Loan Account. I'm a director and there is one other director. He has used the company bank account to withdraw cash, he then provides me with receipts but the cash withdrawl is always greater! So I have charged his DLA when he took out money at ATM then when he provdes me with a relevent business expense receipt I reduce the DLA by this amount.
In about two months will be the 9month repayment date, where he has to pay off his directors loan for that accounting period but he has also had a directors loan account overdrawn for the accounting period that follows. Am I correct in thinking that the DLA account has to be repaid 9months after the accounting period that it relates to? So it is possible to have two dates in which to clear the DLA for two different periods?
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Correct. You are concerned only with the amounts advanced in each period. As far as period 1 goes, the further advances in period 2 are, at first pass, of no relevance as far as the timing or amount of repayment required to avoid a s455 tax in respect of period 1 is concerned.
However, the further advances in period 2 could well have a bearing on whether the repayment actually avoids a s455 charge - due to bed & breakfasting rules. If you need them explained to you then I suggest that you pay a competent adviser to do so.