I recently switched my business from sole trade to limited company. There were various debts that the sole trade business had (which could not be transferred to the limited company), and I have been paying off using income that the limited company received. This has resulted in very large directors loan balance.
I have been wondering if there are any ways I could legitimately reduce down the directors loan. For example, I believe that all the inventory transferred to the limited company was valued at the cost the sole trade business paid for it, rather than the actual market valuation. If I could value the inventory at a fair market price instead, that would reduce down my directors loan significantly. Is that an option?
I also read something about transferring goodwill online, and that this is would be valued using the sole trade profits. Is this something that could also help reduce down the directors loan?
Ideally the accountant that handled the transfer and the first set of limited company accounts would have offered me advice on the above. But they didn't and I am now feeling stuck. I am moving to a new accountant shortly. I would appreciate any advice as to whether the above could be helpful in reducing my directors loan, but also if there are other things that my original accountant missed out on, which I could still take advantage. Finally, are there time limits I need to be aware of in taking forward any of these changes?
Thank you in advance!