It is also an area that most clients do not clearly understand. I hope the this blog post will help in ensuring that directors keep taxman at bay and the company pays the minimum amount of tax within the law.
How does the Director’s Loan Account work?
If a director pays money into the company, it is accounted for in the Director’s Loan Account which is then deemed to be in credit. Withdrawals can also be made, and if the account remains in credit, there are no tax implications.
It is when the account goes overdrawn that potential tax issues arise as the overdraft is seen as an interest-free loan…. Continue Reading