Directors Loan Account

[Bluebird]

Afraid not - if profit is available but you don't take it it doesn't count as you giving anything to the company, so it's not a repayment in any way.

ok, so IF i pay the company, say £2k - this then goes on to the balance sheet as a credit which in turns then equals Profit.

I can then pay that profit as dividends?

[Clare@InTouch]

ok, so IF i pay the company, say £2k - this then goes on to the balance sheet as a credit which in turns then equals Profit.

I can then pay that profit as dividends?

No, profit is sales less expenses. Anything you pay into the company is a balance sheet transaction, meaning it won't effect profit.

If you're looking to reduce the loan then simply pay that £2,000 into the company bank account. That will act as repayment. Whether or not you can pay dividends then depends on profits.

I'd suggest talking this through with your accountant, it sounds like you could do with having a longer (and more diverse) chat about profits, loans and dividends.