Directors Loan - URGENT ADVICE NEEDED - Contractor UK Bulletin Board

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MaryPoppins replied

16 February 2010, 11:18
Originally posted by northernladuk View Post

That still not sorted??

Gawd no. He's informed the CSA that he now resides permanently in Amsterdam, which is how I know he's "apparantly" there. No word from HMRC so I'm waiting for them to start coming after me in his absence. Funtimes!

Fair play to him as he's got away with the lot scott free.
Leave a comment:
northernladuk replied

16 February 2010, 10:30
Originally posted by MaryPoppins View Post

As you can probably tell, it isn't as simple as that. In theory, you are "allowed" to repay the loan whenever, in accounting terms. Be aware though, that as another poster says, this will incur S419 liability. Unless of course you have a co-director who won't mind dealing with it all, while you do a flit to Amsterdam.....

That still not sorted??
Leave a comment:
MaryPoppins replied

15 February 2010, 20:23
Originally posted by St1973 View Post

Guys,

I have an overdrawn directors loan account, overdrawn in the region of 20K. Can I write this off, pay the CT and the S419 payments etc and that would be that?

if so, any stab at how much this would cost?

Any help would be great as my accountants are only saying pay it back, which I cant!

Cheers

As you can probably tell, it isn't as simple as that. In theory, you are "allowed" to repay the loan whenever, in accounting terms. Be aware though, that as another poster says, this will incur S419 liability. Unless of course you have a co-director who won't mind dealing with it all, while you do a flit to Amsterdam.....
Leave a comment:
tim123 replied

15 February 2010, 20:13
Originally posted by St1973 View Post

Guys,

I have an overdrawn directors loan account, overdrawn in the region of 20K. Can I write this off, pay the CT and the S419 payments etc and that would be that?

if so, any stab at how much this would cost?

Any help would be great as my accountants are only saying pay it back, which I cant!

Cheers

If you write it off, it becomes income that you have to pay IT on (with allowance for the CT paid).

If you didn't, eveybody (with a company) would pay themselves this way

tim
Leave a comment:
northernladuk replied

15 February 2010, 11:39
Ouch that sounds like it is going to cost you. How do you get overdrawn by 20K when you have an accountant? Did you not actually use him for money advice and guidance before you did it rather than ignoring his advice once you have screwed everything up?
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Clare@InTouch replied

12 February 2010, 20:37
If the loan is outstanding and you can't/don't repay it within 9 months of your year end - 25% section 419 tax (plus benefit in kind).

You could declare a dividend to clear the loan if you have enough in retained profits - if you're in higher rates of personal tax you'll be looking at 25% effective tax on this extra dividend. No worse off than s419 (which is the whole idea as far as HMRC are concerned).

If you can't repay the loan, delcare a dividend or pay the s419 and CT - submit the accounts and CT return then call HMRC and arrange a payment plan. They are surprisingly helpful if you do in before it becomes late.
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BolshieBastard replied

12 February 2010, 20:09
Originally posted by St1973 View Post

Guys,

I have an overdrawn directors loan account, overdrawn in the region of 20K. Can I write this off, pay the CT and the S419 payments etc and that would be that?

if so, any stab at how much this would cost?

Any help would be great as my accountants are only saying pay it back, which I cant!

Cheers

Yes, write it off and pay the CT & S419! That's what you want to hear isnt it?

I mean, your accountant doesnt know what he's talking about. Does he?
Leave a comment:
St1973 started a topic Directors Loan - URGENT ADVICE NEEDED

12 February 2010, 15:28
Directors Loan - URGENT ADVICE NEEDED

Guys,

I have an overdrawn directors loan account, overdrawn in the region of 20K. Can I write this off, pay the CT and the S419 payments etc and that would be that?

if so, any stab at how much this would cost?

Any help would be great as my accountants are only saying pay it back, which I cant!

Cheers
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