DIRECTORS LOAN ACCOUNT EXPLAINED!

[@safeasrecords]

Great advice. Thanks! (fellow TCGS full Nelser 🙌)

[@joannal2721]

Thank you so much this so so well explained! Really easy to digest and understand. Found this so helpful

[@DarylSkinner]

I personally took advantage of directors loan when done my tax fillings absolutely brilliant

[@jtturner3717]

Hi Aaron, Firstly I would like to say thank you to you & all your collaborators for these video's that you do, you're helping so many people. Before I set up the back account I paid for equipment and trade marks and purchased office supplies etc. The trademarks were purchased back in 2017 & 2022, over the last 18months I’ve purchased Equipment, supplies and apparel. I then set up an account for the business through Quick File Sep 2021. Can I put these into the DLA? If so, how far can I go back? And how do I do it? Thanks Jon

[@BoffixAccountancy]

Thank you! I have passed your thanks and query over to Aaron, he said as long as it's business related and helps generate income then that's fine you can expense them. If you need further support on how to, then consider booking in for a chat with Aaron himself: linktr.ee/AaronPatrick_Boffix

[@wickramadesilva3855]

Thanks for this. If you have £125k on DLA at 31/12/22 year end and a dividend is declared on 31/03/23 and settled against this, would there be any tax consequences except the tax on dividends? Appreciate your reply

[@BoffixAccountancy]

There shouldn't be any tax consequence but you need to declare on the CT600A form to be compliant.

[@simondangar6358]

I like the content but the waving around of your pen is distracting as are the background videos. But really enjoyed your Directors Loan explanation 👍

[@BoffixAccountancy]

Thanks so much for the feedback, we will look to change the background screen for future videos!

[@lawrencer25]

Totally agree with the background video. Very very pointless and distracting

[@tareklandoulsi1734]

Very well explained 😊

[@dorcashenderson6630]

Thanks for the info my dear!! Amazingly explaimed

[@julianmaltos2237]

Great video, thank you for sharing! The situation you described at 9:34 is interesting and relates to what I'm facing now. To simplify, I have one asset and one service I paid with my own debit card, option (1) I can have the company paying these to me; or option (2) I can report them in my director's loan account in my accounting software. Say I go with option (2), does it have any consequence with respect to the VAT? E.g., for my next VAT return, can I still claim back the VAT on the service? And can I still use the AIA for the asset at year end? I understand that with option (1), the above wil work without any issue.

[@BoffixAccountancy]

Between 2 options there is no difference, if you don't pay yourself immediately you can pay whenever. As long as they relate to the business then you can claim back VAT and AIA!

[@julianmaltos2237]

@@BoffixAccountancy Thank you, that's very helpful, appreciate it!

[@harrypalmer6228]

Charging interest on the Directors loan account is also useful if you have invested significant sums

[@DavidSmith-qn8fl]

Really clear explanation, thanks thi video 😊

[@mez6809]

Hi great video, apologies if this appears to be a bit of a silly question but if you are crediting the dividend into a director's loan account, do you need to show the money is physically going out of the company bank account before being transferred back to the director's loan account from an HMRC perspective? I know that doing this would be inefficient but not sure how picky HMRC would be if we just debited retained earnings and credited the director's loan account?

[@BoffixAccountancy]

Yes, you do! We would advise not to touch retained earnings.

[@robertmehmet7339]

Hi, Thanks for the video. If the directors loan account is unpaid and interest is paid by the director. At the point where by 32.5% tax is levied does the director still make interest payment thereafter on arrears ? Furthermore if payments are not made can the director a year down the line reclaim the 32.5%? Would this mean a year of interest free loan ?

[@BoffixAccountancy]

I would recommend talking with an Accountant. You can book a service enquiry with our team here if you don't have an accountant already: bit.ly/3ycvJC8

[@jasonwhidborne5173]

Thank you very informative, I have one question. If you’re in credit in your DLA to the tune of £150k because you have not been taking full dividend and salary are there any tax implications if you were to use this money to fund a new start up? Im only guessing that if you were to invest in something new the opening DLA of the new company would show that you lent it cash so you can withdraw it if need be at a future date.

[@BoffixAccountancy]

You could make use of inter-company loans to transfer to the start-up. We will try and cover this in a future video!

[@rebeccajackson5389]

Can you explain how as a director I can loan the company money without charging interest as I don’t want to make money out of the loan only help with cash flow (due to holding a lot of stock) how does this work I also use quickbooks so would need to know how it looks on there. Thanks

[@BoffixAccountancy]

kzbin.info/www/bejne/aaS2oYCfqpeYmpI check this out! Aarons page goes further into how to utilise QuickBooks!

[@pakufitv4374]

if I was going to get a BTL under the ltd company and I loan my company say 50-70k does that mean until this amount is fully paid then theres no tax? and can ltd borrow a loan more than once?

[@BoffixAccountancy]

I would recommend speaking with an Accountant as many dependabilities are involved. You can book In for a chat with us here: bit.ly/3ycvJC8

[@covid-19gamers55]

Do we have any deadlines to pay back the debt from company back to me (borrower)?

[@BoffixAccountancy]

It needs to be paid back within 9 months after the year-end!

[@EddieGittins]

Hi Aaron Great informative video but I still have a question. Say I lend £100k to a new LTD Company, to buy a BTL Apartment.. Now when it receives rent, I pay mortgage, service fees and insurance.. Then with the remaining monies pay to DLA as part repayment of the original £100k loan. This leaves no profit and therefor no tax. Am i correct no just being daft ???

[@BoffixAccountancy]

The DLA doesn't affect the profit, get in touch if you need more personalised advice from an Accountant such as Aaron: bit.ly/3ycvJC8

[@EddieGittins]

@@BoffixAccountancy Doesn’t affect profits? Can I take any remaining monies each month to repay the initial loan. ? this would leave the account empty!! Therefor No Profit and therefor No Tax. Is this possible. I would like to know this to help me plan towards retirement….

[@Alan-ei6yx]

​@@EddieGittins Did you ever get an answer to this? I'm looking at doing similar. But it seems the Directors Loan can only be repaid from rental profits (after Corp tax is paid). The DLA account can also be repaid by refinance / sale of property as this is not income so does not get taxed. Hope someone can clarify / clear this up.

[@channele2373]

Super educative!

[@amandagriffin6117]

If you pay yourself lots of dividends into the DLA (obviously making sure you have enough profit in the business) does this DLA just keep rolling over into the next year end? Eg pay in £15k of dividends in DLA but only take £10k of this over the year, is the £5k in the DLA still available for the year after? And is the money you take out of the DLA that you pay yourself classed as drawings and not dividends?

[@BoffixAccountancy]

I would recommend booking in and talking with one of our accountants for the best advice on this: bit.ly/3ycvJC8

[@juliejenner8427]

Very helpful indeed. Thank you

[@houseandhomesittersltd467]

Still not clear, if the company is paid monthly interest (say 3% pa) on the director’s loan will this be acceptable to HMRC as a straightforward commercial transaction, or will the repayment and 32.5% tax scenario still apply?

[@BoffixAccountancy]

The interest means you won't need to do a P11D, the 32.5% still applies as they are 2 separate taxes. For further info feel free to chat with one of our team: bit.ly/3ycvJC8

[@houseandhomesittersltd467]

@@BoffixAccountancy Thanks! 😊❤️

[@houseandhomesittersltd467]

What if the loan is made to a third-party (i.e. not a shareholder or director of the company)? Thinking of the scenario where the company is paid 3%, but the individual can (currently) invest the money in a savings account at 6.05%.

[@BoffixAccountancy]

@@houseandhomesittersltd467 It would then be an actual normal loan, not a Directors' loan. So normal loan rules will apply! You can discuss your options further with an Accountant by getting in touch here: bit.ly/3ycvJC8

[@lawrencer25]

Very very helpful video. Thank you 👍👍👍

[@BoffixAccountancy]

You're welcome!

[@harrypalmer6228]

Ant Middleton is the Directors Loan account expert (allegedly)

[@coderider3022]

Example salary is 750 but that’s not minimum wage and for “director” (skilled person) assumption is this is evasion. Is just an example and in reality other rules should apply to stop this ?

[@BoffixAccountancy]

You can discuss this with one of our Accountants here: bit.ly/3ycvJC8

[@joe9125]

Is directors acc on paper or it’s actual acc ?

[@BoffixAccountancy]

On paper!

[@joe9125]

@@BoffixAccountancy grt

[@entubaotraducciones272]

thank ypu

[@CRAZYCR1T1C]

God HMRC makes business in UK stupidly complicated. Might as well become an accountant instead of being and entrepreneur

[@magnusbuckus3266]

HMRC doesn't set the rules.

[@drhmufti]

While the spoken content is really helpful, the screen behind you is really distracting and giving me a headache!

[@BoffixAccountancy]

This has been updated for new videos. Thanks for the feedback!