Any Answers Answered: Director's loan

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AccountingWEB member ChrisA faced a conundrum after a client he had taken on came to him with an unpaid invoice query. 

The client, a director and only shareholder of a company, had been invoiced for legitimate work done as a customer of the same company.

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About Rachael Power

Your friendly, neighbourhood community editor. 

Twitter: @rachpower10 


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09th Nov 2012 14:21

Interpretation of S456(3) CTA 2010

Thanks Rachel, made me look back at the legislation and remind myself of the 6 month rule.

As this uses 'or' it appears to me that you are caught by a charge under S455 if either credit longer than normal or more than six month.  Therefore for a retail company never giving credit to other customers, any credit to director would be caught.  Slightly academic perhaps as needs to be outstanding nine months after year end anyway, but still interest.

Also cause to look at the 'debt' rules when establishing control (entitlement to assets on winding up) for associated company purposes, reminder that not all DCA balances need to be counted.

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